IREDA gets approval to raise ₹4,500 crore via QIP, government to dilute up to 7% stake

Indian Renewable Energy Development Agency (IREDA) has received the green light from the Department of Investment and Public Asset Management (DIPAM) to raise up to ₹4,500 crore through a Qualified Institutional Placement (QIP). This fundraise will result in a dilution of the government’s stake by up to 7% of the company’s post-issue paid-up equity.

The decision was approved by the Alternative Mechanism following recommendations from a High-Level Committee. IREDA’s Board had already given its in-principle approval in August 2024, considering various fundraising options, including a Further Public Offer (FPO), Rights Issue, or Preferential Issue.

As of September 18, IREDA’s stock price fell slightly by 0.15%, closing at ₹227.39. However, the stock has surged nearly 120% since the start of the year and is currently trading over seven times its initial public offering (IPO) price of ₹32 per share, set in November 2023.

The Government of India currently holds a 75% stake in IREDA, with the company’s market capitalization standing at ₹61,117 crore. The fresh equity issuance is expected to be executed in one or more tranches, helping IREDA boost its capital base for future growth.