IREDA Aims for FPO by FY25-End, Eyes Lower Borrowing Costs: CMD Pradip Kumar Das Reveals Plans

Mumbai: Indian Renewable Energy Development Agency (Ireda) is working on ways to lower its borrowing costs while planning a follow-on public offer (FPO) by the end of this fiscal year, said chairman and managing director (CMD) Pradip Kumar Das.

Ireda aims to reach ₹3.5 trillion in assets under management by 2030, up from ₹63,200 crore as of June 30, according to Das.

The state-owned company has applied to the government for its FPO and, once approved, plans to raise ₹4,000-5,000 crore through fresh equity, Das said.

“We need at least ₹4,000-5,000 crore in equity infusion this fiscal year to maintain a healthy capital-to-risk assets ratio (CRAR),” said Das. CRAR measures a bank’s capital in relation to its risk-weighted assets and helps assess financial stability.

“This equity infusion will help us sustain the growth we’ve seen in the past four years and improve further,” he said.

The non-banking finance company (NBFC) expects its borrowing costs to decrease after its anticipated inclusion under section 54EC of the Income Tax Act in the upcoming Union budget. This inclusion would exempt investors in Ireda’s bonds from capital gains tax, making its commercial papers more attractive and helping lower its coupon rates.

“Section 54EC will help reduce our borrowing costs by 5-10 basis points,” said Das. However, he noted that raising bonds under Section 54EC requires widespread brand recognition to attract investors.

The NBFC’s average borrowing cost decreased from 7.81% on March 31 to 7.78% on June 30, Das said.

Das also called on the government to define the taxonomy for a green bond market in India, which could help companies like Ireda borrow at lower costs through debt instruments.

“Although our lending is 100% for green energy, we don’t receive any benefit from that,” Das said.

Ireda shares reached an all-time high of ₹310 each on the BSE on Monday, following better-than-expected earnings for the quarter ending June 30. The stock closed nearly 2% higher at ₹289.80.

Ireda reported a revenue of ₹1,510 crore and a profit of ₹384 crore, with revenue and profit growing 32% and 30%, respectively, year on year. The company’s June-quarter earnings were disclosed after market hours on Friday.