The Indian Renewable Energy Development Agency (IREDA) surged 87 percent on its market debut on November 29 backed by strong market conditions, healthy IPO subscription figures and expected growth in the renewable energy space.
The blockbuster debut saw the government-owned firm’s market capital nearly double to Rs 16,124 crore.
The stock listed at a higher-than-expected price of Rs 50 on the National Stock Exchange, up 56 percent from the issue price of Rs 32. Analysts had expected IREDA to list at around 30-35 percent premium over the issue price.
As the day progressed, the stock gained strength to hit Rs 60 in the afternoon, which was 20 percent higher than the listing price and also its upper circuit limit.
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For IREDA, which listed on the BSE in the 'B' group category, the upper and lower circuit limit is 20 percent of the opening price.
The stock traded briskly, with 57.97 crore shares changing hands on the NSE and 3.81 crore on the BSE.
"The listing was above market expectations, reflecting the strong fundamentals and growth potential of the company," Shivani Nyati, Head of Wealth at Swastika Investmart, said.
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IREDA's strong financial performance and focus on the burgeoning renewable energy sector makes it an attractive investment proposition, she said. The renewable energy sector is poised for significant growth in the coming years, driven by government initiatives and increasing environmental concerns.
The company's long-term prospects also appear promising, making it a worthwhile investment for those with a long-term horizon, she said.
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The company saw the best listing gain after SBFC Finance, which closed with a 61.77 percent rally on debut on August 16, and the fifth best in 2023 after Ideaforge Technology, Utkarsh Small Finance Bank, Netweb Technologies, SBFC Finance, and Cyient DLM.
Prashanth Tapse, research analyst and senior VP research, Mehta Equities, said IREDA can act as a proxy play for the growth in the Indian renewable energy space. He advised holding IREDA for th elong term.
The Mini Ratna (Category - I) government enterprise provides financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects.
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The company raised Rs 2,150 crore through the IPO, which was subscribed 38.8 times during November 21-23
The company plans to use the issue proceeds of Rs 1,290 crore to meet capital requirements and for onward lending. The government earned Rs 860 crore by offloading some of its stake in the company.
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