Dream debut: IREDA’s stock zooms ahead with 87.4% listing gains

• The stock closed at ₹59 as compared to the issue price of ₹32 on opening day.
• The grey market was expecting 31% listing gains from the stock.
• The market cap of the company is at ₹11,920 crore, according to Bombay Stock Exchange.

State-run green financier IREDA’s stock made a dream debut on the bourses, providing its investors with 87% listing gains. It became one of the most successful PSU market debuts, second only to IRCTC’s stellar debut of over 100% listing gains.

IREDA’s stock closed at ₹59 after gaining through the day – beating grey market expectations of 31% listing gains — by a large margin. The market cap of the company stood at ₹16,123 crore, according to Bombay Stock Exchange.

Its ₹2,150 crore initial public offer (IPO) was subscribed 38.8 times the shares on offer, with substantial interest from institutional investors. The qualified institutional buyer (QIB) portion was subscribed 104 times. Due to the high number of applications, investors who missed the IPO allotment scrambled for the stock on listing day.

“We believe post listing there would be decent demand for the shares as it had received overwhelming response from all kinds of investors especially from long term funds. while those who failed to get allotments can accumulate on every dip for holding it for healthy long term returns as markets always reward a player who has high visibility and growth potential,” said Prashanth Tapse, senior VP of research at Mehta Equities.

The last few market debuts saw mixed results ranging from muted debuts to sharp listing gains.

Here are the listing gains of the last few market debuts


‘Potential to upgrade to a Navratna’

IREDA is positioned as India's largest green financing NBFC. It has over 36 years of experience in promoting, developing and extending financial assistance for new and renewable energy projects. It also serves energy efficiency and conservation projects.

Tapse says that IREDA has the potential to upgrade to a Navratna company. “The NBFC's financial autonomy is expected to boost its competitive edge,” he adds.

The public financing institution (PFI) intends to use the net proceeds from the fresh issue towards augmenting its capital base to meet future capital requirements and onward lending.

It provides financial products and related services, from project conceptualisation to post-commissioning, for and other value chain activities like equipment manufacturing and transmission. As of September 30, 2023, it had a diversified portfolio of term loan outstanding amounting to ₹47,514 crore.

Its revenue from operations grew 24% in FY23, as compared to the year before. Its net profit grew 36% during the same period. Its capital to risk-weighted asset ratio (CRAR) stood at 18.8% for FY23. Its gross non-performing assets (NPA) stood at 3.21% by the end of FY23.

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