IREDA share price: The stock soared 11.24% to reach an intraday high of Rs 265.75. It was last observed trading 9.94% higher at Rs 262.65. With this, the multibagger stock has surged 150.98% year-to-date (YTD).
Shares of Indian Renewable Energy Development Agency (IREDA) Ltd saw a significant surge in Thursday’s trading session after the company announced plans to consider a fundraising proposal of up to Rs 4,500 crore. The stock jumped 11.24 percent, reaching a day high of Rs 265.75, before settling 9.94 percent higher at Rs 262.65. This marks a substantial year-to-date (YTD) gain of 150.98 percent for the stock, which has also experienced a remarkable rise from its initial public offering (IPO) price of Rs 32, listed on November 29 last year.
However, despite this recent growth, IREDA’s stock has dipped 15.27 percent from its record high of Rs 310, observed on July 15, 2024.
In a filing with the Bombay Stock Exchange (BSE), IREDA stated, “A Board meeting of Indian Renewable Energy Development Agency Limited is scheduled for Thursday, August 29, 2024, to consider and approve the proposal for raising funds through equity share capital amounting to up to Rs 4,500 crore. This may be done in one or more tranches via Further Public Offer (FPO), Qualified Institutional Placement (QIP), Rights Issue, Preferential Issue, or any other permitted mode, subject to necessary statutory or government approvals.”
Analysts have expressed mixed opinions on the stock. ICICIDirect analysts remain optimistic due to the government’s emphasis on the renewable sector, expecting long-term growth in assets under management (AUM). They have assigned a ‘Buy’ rating on the stock, valuing it at 49 times FY26E EPS, with a target price of Rs 330.
Conversely, analysts at Phillip Capital have maintained a ‘Sell’ rating with a revised target of Rs 130. They believe the recent rally is largely driven by passive flows rather than strong fundamentals, asserting that the stock’s best performance may already be factored in.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that IREDA has been consolidating in recent weeks. Post-IPO, it has been a strong performer, buoyed by the focus on renewable energy and lending to related projects. However, he warned that valuations are currently fully priced-in, suggesting investors should maintain a strict trailing stop loss. For those with a long-term perspective and a high-risk appetite, Bathini recommended adding IREDA to their portfolio.
Technically, the stock finds support at Rs 245, with additional support levels at Rs 230-220. Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, commented, “Support is seen at Rs 245, with resistance at Rs 270. A decisive close above Rs 270 could trigger further upside towards Rs 300. In the short term, the expected trading range is between Rs 240 and Rs 300.”
Osho Krishan, Senior Research Analyst – Technical & Derivatives at Angel One, noted that IREDA underwent a correction after its impressive rally from Rs 200 to Rs 310. He highlighted that the Rs 230-220 range is likely to offer support, with sacrosanct support at Rs 200. On the upside, resistance is expected between Rs 280 and Rs 300.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, suggested, “The stock could reach an upside target of Rs 270, with a stop loss placed at Rs 225.”
In terms of financial performance, IREDA reported a 30 percent increase in profit after tax (PAT) for the June 2024 quarter (Q1 FY25), amounting to Rs 384 crore, compared to Rs 295 crore in the same quarter last year. Revenue from operations grew 32 percent year-on-year (YoY) to Rs 1,510 crore from Rs 1,143 crore in the corresponding quarter. The company’s outstanding loan book stood at Rs 63,207 crore in Q1, up 34 percent from Rs 47,207 crore in the year-ago period.
IREDA, a ‘Navratna’ public sector undertaking (PSU) under the Ministry of New and Renewable Energy, is 75 percent owned by the government as of June 2024. The company provides a range of financial products and services for renewable energy projects, from inception to post-completion, including equipment manufacturing and transmission.
