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IREDA mulling to raise ₹4500 crore capital to become future ready

ICICIdirect Research 23 Aug 2024 DISCLAIMER

IREDA is seeking to raise ₹4500 crore of equity to strengthen balance sheet for continued strong business growth. A board meeting is scheduled on 29 August 2024, for approval for the said capital raising along with the mode (i.e FPO, QIP) to be adopted.
Government’s targeting renewable energy capacity of 500 GW by FY30 presents long term sustainable growth opportunity for IREDA, which specializes in funding renewable power projects.
Accordingly, IREDA has estimated an AUM target of ₹3.5 lakh crore in FY30, which depicts a sustained business growth of more than 25% CAGR in next 5-6 fiscals. For FY25E, IREDA plans to disburse ₹30,000 crore, for which approval for raising ~₹24,000 crore, in lieu of borrowing has been obtained by the board.
Aforesaid capital raising of ₹4500 crore, will further shore up networth by ~50% and remain book value accretive to the extent of ~35% (assuming discount of 5% on current price), thus strengthening balance sheet for projected business growth for next 2 years. 

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