IREDA shares in focus after Q1 business update; loan book up 34% YoY

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) are in focus on Monday morning after the PSU said it recorded loan sanctions of Rs 9,136 crore in the June quarter, up 382.62 per cent year-on-year (YoY) over Rs 1,893 crore in the June quarter of last year.

Loan disbursements for the quarter came in at Rs 5,320 crore, up 67.61 per cent over the year-ago's Rs 3,174 crore. The outstanding loan book stood at Rs 63,150 crore for the quarter ended June 30, up 33.77 per cent over the year-ago's Rs 47,207 crore.

"Given government’s focus on renewable sector, we remain positive on long term growth prospects which will aid long term sustained growth in AUM. Thus, we assign a Buy rating on the stock with a target price of Rs 250, valuing the business on DCF basis assuming discounting rate at 12 per cent and terminal growth at 6.5 per cent," ICICIdirect said in a recent note.

Last month, IREDA informed stock exchanges that it has successfully raised Rs 1,500 crore today through issuance of bonds. 

The bond issuance, which consisted of base issue of Rs 500 crore and green shoe option of Rs 1,000 crore, was subscribed 2.65 times. The funds were raised at an annual interest rate of 7.44 per cent for a tenure of 10 years and 2 months.

This successful capital raising was seen enabling IREDA to further strengthen its efforts in financing green energy projects, contributing to India’s goal of achieving 500 GW non-fossil fuel installed capacity target by 2030.