Key renewable power play IREDA board has approved raising Rs 5000 crore through a QIP or qualified institutions placement in one or more tranches. The filing at the exchanges specified that the board has decided that fund raising is subject to shareholder approval and Govt shareholding will not decirease more than 7% of the company’s post-issue paid-up equity share capital.
The funds raised are expected to be used to support demand for green energy financing. It will be put to use to scale up support for clean energy financing initiatives in the country.
IREDA raised Rs 4500 cr via QIP in September, 2024
This is second approval from the Indian Renewable Energy Development Agency board for raising funds via QIP in a span of less than 6 months. The board had earlier approved raising up to Rs 4,500 crore through another QIP in September last yea. DIPAM (The Department of Investment and Public Asset Management) approved this fresh equity issue.
Why did IREDA chose to raise funds via QIP
QIP or qualified institutions placement is an instrument to raise funds. Companies use it to raise funds via qualified institutional buyers. Some of the key advantages of this kind of fund raising initiative include lower transaction costs, better pricing, and access to exclusive deals. However, it is dependent on market rates and runs the risk of underpricing depending on market conditions.
IREDA stock Vs Nifty
The IREDA stock ended Thusday’s session down 2%. It had slumped to intrad-day low of Rs 195.29, down 3% before recovering some ground in late trade. The stock hit a 52-week low of Rs 121 on March, 2024 while it hits its 52-week high on July last year. The stock is down over 5% in 5 days and a whopping 24% in last 6 months. However, over 1 year time-frame it has delivered 27% plus returns to investors.
In the same period if we compare the stock to Nifty’s performance, Nifty gave investors 9% returns over 1 year while over 6 months, the benchmark Index deliveed negative returns of 5%.
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