IREDA Eyes FPO And Perpetual Debt Options To Meet Future Capital Needs For Renewable Projects
IREDA considers FPO and perpetual debt to meet future capital needs for renewable projects, with plans for increased loan disbursements and market support.
State-owned non-banking finance firm Indian Renewable Energy Development Agency is mulling follow on public offer as well as perpetual debt to meet its future capital requirements and onward lending for renewables. IREDA Chairman pointed out that the market is supportive and this is the right time to go to the market for raising funds via FPO.
Addressing a media round table discussion, IREDA Chairman and Managing Director Pradip Kumar Das said the company is planning an FPO as well as perpetual debt for meeting future capital requirements of the company and onward lending mainly for renewable energy projects.
The Rs 2,150 crore initial public offering was oversubscribed about 39 times in November 2023.
He further said the loan disbursements are expected to increase during the current fiscal year in view of the government's push for renewable energy projects in the country.
He said the company's loan disbursements increased from Rs 16,071 crore in 2021-22 to Rs 21,639 crore in 2022-23 and further to Rs 25,089 crore in 2023-24.
Loan disbursements by IREDA increased about 16 per cent in 2023-24, he said, adding that the company has a borrowing plan of Rs 24,200 crore for the current fiscal.
With increase in loan disbursements in 2024-25, the company will require more money than planned borrowing this fiscal to meet its fund requirements, he said.
On the FPO, he pointed out that the market is supportive and this is the right time to go to the market for raising funds via FPO.
However, he did not specify when IREDA will go for the FPO and that 'it is difficult to tell whether it would be this fiscal or next'.
The FPO proposal will require the Union Cabinet's approval, he said.
IREDA's cumulative loan book stood at Rs 59,698 crore as on March 31, 2024.
Das said the company will soon be listed for issuing bonds eligible for exemption under Section 54EC of Income Tax Act.
Section 54EC bonds, also known as capital gain bonds, are fixed income instruments that provide capital gains tax exemption under Section 54EC to investors.
REC Ltd, National Highway Authority of India, Power Finance Corporation, and Indian Railway Finance Corporation can issue bonds under Section 54EC at present.
