IREDA shares dive 30% in 2025 so far; should you enter the stock or avoid it?

Shares of Indian Renewable Energy Development Agency (IREDA) Ltd settled 3.30 per cent higher at Rs 154.90 on Friday. Even as the stock has climbed today, it has corrected 30.16 per cent year-to-date (YTD). IREDA is scheduled to hold its board meeting on March 25 to consider the borrowing plan for the financial year 2025-26 (FY26). The state-run renewable energy financier also mentioned that its borrowing limit has been increased by Rs 5,000 crore to Rs 29,200 crore for FY25.

Separately, IREDA has launched its first-ever issue of perpetual bonds of Rs 1,247 crore at an annual coupon rate of 8.40 per cent. In addition, the PSU financier has also received a refund of Rs 24.48 crore from the Income Tax (I-T) department for assessment year (AY) 2011-12 due to certain disallowances. "Refund of approximately Rs 195 crore is under process for similar relief provided by CIT (Appeals) for AYs 2010-11, 2012-13, 2013-14, and 2015-16 to 2018-19, which is yet to be received," IREDA further stated.

A few market experts largely suggested that the counter may remain 'weak' in the near term. One of them advised against creating fresh buy positions.

"The downtrend remains intact in the counter. Until IREDA clearly sustains above Rs 166 level, investors should exit on pullbacks as it may witness selling pressure at higher levels. Overall, the structure is also slightly weak. Fresh entry not advised at current levels," Jatin Gedia of Mirae Asset Sharekhan told Business Today.

"The stock has been experiencing a significant downward trend. On the support side, the historical range of Rs 140-130 is expected to provide some stability. On the resistance side, we may encounter obstacles at Rs 155-162 levels. A sustained breakthrough above this resistance could generate momentum in the stock," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"IREDA is a company thought to be in solar power generation. People bought it as a power generating company not realising this also is a finance company which is catering primarily to renewable energy and within renewable energy, focusing on solar. It's again like a bank or an NBFC but dedicated to a particular activity. From Rs 32 to 320, a 10x jump from listing to its high and now it's around 150 or thereabouts. This was the kind of madness that happened in these shares. So, I believe there is still some pain left in the counter," said market expert Arun Kejriwal.

The counter traded higher than the 5-day, 10-day and 20-day simple moving averages (SMAs) but lower than the 30-day, 50-, 100-, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 65.51. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The stock has a price-to-equity (P/E) ratio of 26.27 against a price-to-book (P/B) value of 4.32. Earnings per share (EPS) stood at 5.71 with a return on equity (RoE) of 16.43. According to Trendlyne data, IREDA has a one-year beta of 1.4, indicating high volatility.

The company is a 'Navratna' PSU under the administrative controls of the Ministry of New and Renewable Energy. As of December 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.