The Indian Renewable Energy Development Agency's (IREDA) initial public offering (IPO) concluded yesterday with an overwhelming response from investors, underscoring robust confidence in India's renewable energy sector. The state-run non-bank lender's IPO was oversubscribed by a staggering 38.80 times, driven by substantial demand across all categories of investors.
The offering, which marked the first government-run company IPO since the Life Insurance Corporation's debut last year, aimed to raise ₹2,150.21 crore ($258 million). This capital infusion is intended to bolster IREDA's capacity to finance India's ambitious renewable energy goals. The final day of bidding saw an impressive participation from Qualified Institutional Buyers (QIBs), who subscribed 104.57 times their allocated share quota. Non-Institutional Investors (NIIs) and retail investors also showed strong interest, with subscriptions reaching 24.16 times and 7.73 times their respective quotas.
Employees of the company participated keenly as well, subscribing 9.80 times the portion set aside for them. The total number of bids surpassed 18 billion, significantly higher than the nearly 0.5 billion shares on offer. Retail bids alone neared 2 billion shares, more than eightfold their allotment of 234 million shares.
IREDA has been elevated to 'Schedule A' status and designated as a Navratna public sector enterprise, granting it financial autonomy and obliging it to adhere to stringent corporate governance practices – factors that may have contributed to the high level of investor interest.
The IPO comprised both fresh issues of shares and an offer for sale (OFS) from the Indian government through the Ministry of New and Renewable Energy. Ahead of its stock market debut scheduled for early December, IREDA has demonstrated solid financial performance with over forty percent profit growth and an approximate fifty percent rise in interest income.
Investors are now looking forward to the share allotment date on November 29 and the commencement of trading on stock exchanges slated for December 4. The success of this IPO is indicative of the market's optimism regarding the prospects of renewable energy financing in India.
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