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hares of state-run Indian Renewable Energy Development Agency (IREDA) extended gains for the second consecutive session on Thursday (November 30) post listing. The stock gained 15% to hit an intra-day high of ₹68.91 apiece against the previous close of ₹59.99 on the BSE.
Investors who got shares of IREDA in its recently concluded maiden offering more than doubled their money as the total gains in the two sessions stood at 115% over the IPO issue price of ₹32. Market cap of IREDA rose to ₹18,010.71 crore today.
Several analysts recommend investors to hold the stock for the medium to long term considering IREDA's strong fundamentals and growth potential.
"A conservative investor can think of booking profits as IREDA as doubled from its IPO price while risk-takers can continue holding it for long-term as we believe IREDA will act as a proxy play for the growth in the Indian Renewable Energy sector," said Prashanth Tapse, Research Analyst, Sr VP Research at Mehta Equities.
Shivani Nyati of Swastika Investmart said the company's long-term prospects appear promising, making it a worthwhile investment for those with a long-term horizon.
"IREDA's strong financial performance and focus on the burgeoning renewable energy sector make it an attractive investment proposition. The sector is poised for significant growth in the coming years, driven by government initiatives and increasing environmental concerns," Nyati said.
Shreyansh Shah of StoxBox believes the company is attractively valued at the current price-to book value multiple of 1.2 times. "We advise investors who have received allotment to hold their shares from a medium to long-term perspective," he said.
The issue witnessed an overwhelming response, oversubscribed by 38.8 times, with investors buying 1,827.25 crore equity shares as against an offer size of 47.09 crore shares.
The qualified institutional buyers (QIB) portion was booked 104.57 times, high net-worth individuals at 24.16 times and retail investors at 7.73 times.
IREDA has seen fastest growth in gross loan portfolio with 30% CAGR over FY21-23 versus peers. The company's profit after tax grew by 58% CAGR during the same period. Its capital profile is well within the Reserve Bank of India's guideline. Its return ratios are healthy with return on equity and return on asset at 15% and 2%, respectively, for FY23.
IREDA is a miniratna (Category - I) government enterprise. It is administratively controlled by the Ministry of New and Renewable Energy (MNRE). It has been actively promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects for over 36 years.