Shares of Indian Renewable Energy Development Agency (IREDA) Ltd rose sharply in Thursday's trade after the company said it would consider a fundraising proposal of up to Rs 4,500 crore. The stock surged 11.24 per cent to hit a day high of Rs 265.75. It was last seen trading 9.94 per cent higher at Rs 262.65. At this price, the multibagger counter has gained 150.98 per cent on a year-to-date (YTD) basis. Also, IREDA's stock has seen a massive uptick from its initial public offering (IPO) price of Rs 32. It was listed on November 29 last year.
Despite the mentioned rise, the counter has slipped 15.27 per cent from its record high value of Rs 310, a level seen on July 15, 2024.
"This is to inform that Board meeting of Indian Renewable Energy Development Agency Limited is scheduled to be held on Thursday, August 29, 2024, inter-alia, to consider and approve the proposal for raising of funds by way of equity share capital for an amount aggregating of up to Rs 4,500 crore in one or more tranches through Further Public Offer (FPO) / Qualified Institutional Placement (QIP) / Right Issue / Preferential Issue or any other permitted mode or a combination, as may be deemed appropriate, subject to the Statutory or Govt. Approval," it stated in a BSE filing.
Analysts largely remained divided on the stock. "Given the government's focus on the renewable sector, we remain positive on growth prospects which will aid long-term sustained growth in AUM," said analysts at ICICIDirect. "Thus, we value the stock at 49 times FY26E EPS, assigning a target of Rs 330," they added with a 'Buy' rating on the stock.
Phillip Capital analysts have maintained their 'Sell' rating with a revised target of Rs 130. "The recent rally in the stock is driven by passive flows rather than any major fundamental reason. We believe the best is already priced into the stock," it said post Q1 results.
"IREDA has been in a consolidation phase over the last few weeks. Post-IPO, the stock is one of the strong performers. Due to the focus on renewable energy and lending towards renewable projects, the scrip has been gaining momentum. But, valuations are fully priced-in at this point in time. So, one should have a strict trailing stop loss. For a long-term perspective, investors with a high-risk appetite can add IREDA to their portfolio," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
Technically, support on the counter could be seen at Rs 245, followed by the Rs 230-220. "Support will be at Rs 245 and resistance at Rs 270. A decisive close above Rs 270 level may trigger a further upside towards Rs 300. The expected trading range will be between Rs 240 and Rs 300 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.
"IREDA underwent some correction after the stellar rally from Rs 200 to Rs 310. On the level-specific front, Rs 230-220 is likely to cushion, while sacrosanct support lies at Rs 200. On the higher end, a series of resilience could be seen from Rs 280 to Rs 300 in the comparable period," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
"The stock can hit an upside target of Rs 270. Keep a stop loss placed at Rs 225 for this trade," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.
The state-run firm said its profit after tax (PAT) climbed 30 per cent to Rs 384 crore for the June 2024 quarter (Q1 FY25) compared with Rs 295 crore in the corresponding quarter of last year.
During the quarter under review, revenue from operations grew 32 per cent year-on-year (YoY) to Rs 1,510 crore from Rs 1,143 crore in the same quarter last year. IREDA said its outstanding loan book stood at Rs 63,207 crore in Q1 against Rs 47,207 crore in the year-ago quarter, up 34 per cent.
IREDA is a 'Navratna' PSU under the administrative controls of the Ministry of New and Renewable Energy. As of June 2024, the government held a 75 per cent stake in it.
The organisation offers financial products (fund- and non-fund-based) associated services, from project inception to post-completion, for renewable energy projects and related activities like equipment manufacturing and transmission.