IREDA shares tank 6% as Q1 profit slumps 36% as bad loans surge; Gensol exposure in focus

IREDA shares are down over 20 percent since the beginning of the year.

Shares of Indian Renewable Energy Development Agency (IREDA) slipped 6 percent to Rs 160 in morning trade on July 11 after its asset quality took a sharp hit in the June quarter, overshadowing strong loan growth and denting investor sentiment. The state-run lender reported a 35.7 percent year-on-year drop in net profit to Rs 247 crore, largely due to a rise in bad loans.

Gross non-performing assets (NPAs) jumped to 4.13 percent from 2.45 percent in the March quarter, while net NPAs worsened to 2.05 percent from 1.35 percent. The deterioration comes amid mounting concerns over IREDA’s exposure to Gensol Engineering, which is currently undergoing insolvency proceedings.

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IREDA has a total exposure of Rs 470 crore to Gensol, comprising a Rs 254.9 crore term loan and working capital lines worth Rs 215.7 crore. Earlier this month, the National Company Law Tribunal admitted IREDA’s insolvency petition against the troubled borrower, turning the spotlight on its asset quality metrics—long considered a key monitorable.

Despite the pressure on the bottom line, operational momentum remained strong. Total income rose nearly 29 percent year-on-year to Rs 1,947 crore, backed by a surge in loan activity. Loan sanctions climbed 28.5 percent to Rs 11,740 crore, while disbursements during the April-June period stood at Rs 6,981 crore, up 31.1 percent from a year earlier. The lender’s loan book expanded to nearly Rs 80,000 crore—up 26.5 percent from Rs 63,207 crore last year.

The stock remains more than 40 percent below its all-time high of Rs 310. IREDA shares are down over 20 percent since the beginning of the year.

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