IREDA secures Centre’s nod to raise up to ₹4,500 cr via QIP; govt aims to offload 7% stake

State-owned Indian Renewable Energy Development Agency (IREDA) has received government approval to raise up to ₹4,500 crore by issuing equity shares through a qualified institutional placement (QIP).

The government aims to dilute its stake in IREDA by 7 per cent on a post-issue basis, which will be carried out in one or more tranches.

The approval was given by the Department of Investment and Public Asset Management (DIPAM), which deals with all matters related to managing central government equity investments. A company statement said the approval was given on the basis of a high-level committee's recommendations.

“This is to inform you that the Department of Investment and Public Asset Management (DIPAM) vide their OM dated September 18, 2024, conveyed the approval of the alternative mechanism upon the recommendation of a high-level committee on the proposal of the raising of funds by IREDA,” the statement said.

The money will be raised through the QIP route, which is a measure through which companies can raise capital by selling shares or other securities to qualified institutional buyers.

“…. alternative mechanism has allowed for the dilution of GOI shareholding in IREDA, owing to issue fresh equity through qualified institutional placement (QIP) route up to 7 per cent of the paid-up equity of IREDA on a post-issue basis in one or more tranches,” the state-owned company said.

IREDA aims to build up its capital base, which will help scale up its financing for renewable energy projects, according to a report by PTI.

On September 2, Mint reported that IREDA has sought government approval to sell up to 10 per cent stake, as it plans to raise around ₹4,500 crore in equity to fund growth.

Fundraising is for IREDA to have a fair amount of loan book as well as CRAR (capital to risk-weighted assets ratio), the Mint report added, quoting IREDA Chairman Pradip Kumar Das at Financing 3.0 Summit organised by Confederation of Indian Industry.