IREDA IPO: Subscription opens for three days on November 21, price band set at Rs 30-32 per share

Government-controlled Indian Renewable Energy Development Agency (IREDA) has set a price band for its initial public offering at Rs 30-32 a share, which will open on November 21 and close on November 23. The anchor book will open on November 20, i.e. next Monday.

The issue consists of a fresh issue of up to 403.16 million shares and offer for sale (OFS) of up to 268.78 million shares by the Government of India, the company said in a regulatory filing on Tuesday. Currently, the government holds 100 per cent stake in the firm. The basis of allotment will be done on November 23, followed by the initiation of refund on November 28. The firm will list on exchanges on December 1. 

The floor price is three times the face value of the equity shares and the cap price is 3.20 times the face value of the equity shares. The price/earnings ratio based on diluted EPS for fiscal 2023 at the floor price is 7.94 times and at the cap price is 8.47 times. IREDA IPO lot size is 460 equity shares and in multiples of 460 equity shares thereafter.

On the upper price band, the state run firm will raise around Rs 1,290 crore via fresh issue and Rs 860 crore via Offer for Sale (OFS). On the upper price band, the firm valued at Rs 8,600 crore.

"The Offer is for up to 67,19,41,177 equity shares of face value of Rs 10 each  (comprises of a fresh issue of 40,31,64,706 equity shares and an offer for sale of up to 26,87,76,471 Equity Shares). The RHP has been filed with the Registrar of Companies, Delhi and Haryana on November 11, 2023. RHP has also been filed with the SEBI and submitted to NSE and BSE, for publication on their respective websites," the filing said. 

IREDA IPO has reserved not more than 50 per cent of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15 per cent for Non Institutional Investors (NII), and not less than 35 per cent of the offer is reserved for Retail Investors.

IDBI Capital Markets & Securities, BOB Capital Markets, and SBI Capital Markets are the merchant bankers to the issue, while Link Intime India is the registrar of the offer.

"Additionally, in accordance with the applicable provisions of the SEBI ICDR Regulations, the Committee of the Independent Directors in their meeting held on November 13, 2023 has recommended the price band of Rs 30 per Equity Share (Floor Price) - Rs 32 per Equity Share (Cap Price), based on the quantitative factors and key performance indicators disclosed in the RHP (“Recommendation”), which has been subsequently approved by the board of directors on November 13, 2023. In terms of the SEBI ICDR Regulations, the Recommendation has been included in the price band advertisement and approved by the Board on November 13, 2023," the filing further said. 

Founded in 1987, Indian Renewable Energy Development Agency Limited is a Mini Ratna Government of India Enterprise under Government of India and administratively controlled by the Ministry of New and Renewable Energy. Till September 2023, the firm reported total income of Rs 2,320.46 crore against Rs 1,577.75 crore a year ago. 

Its net profit for the half year was at Rs 579.32 crore against Rs 410.27 crore last year. Gross and net NPA for the half year was at 3.13 per cent and 1.65 per cent in comparison to 5.06 per cent and 2.72 per cent, respectively, last fiscal. Provision coverage ratio stood at 48.11 per cent.

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