Indian Renewable Energy Development Agency Limited is a wholly owned Government of India ('GoI') enterprise under the administrative control of the Ministry of New and Renewable Energy (the 'MNRE') and is registered with the Reserve Bank of India (the 'RBI') as a Systemically Important Non-Deposit-taking Non-Banking Finance Company (a 'NBFC-ND-SI'), with Infrastructure Finance Company ('IFC') status. They were also conferred with the Mini Ratna (Category I) status in June 2015 by the DPE. IREDA is a financial institution with over 36 years of experience in the business of promoting, developing and extending financial assistance for new and renewable energy ('RE') projects, and energy efficiency and conservation ('EEC') projects. They provide a comprehensive range of financial products and related services, from project conceptualisation to post-commissioning, for RE projects and other value chain activities, such as equipment manufacturing and transmission. Company has financed projects across multiple RE sectors such as solar power, wind power, hydro power, transmission, biomass including bagasse and industrial co-generation, waste-to-energy, ethanol, compressed biogas, hybrid RE, EEC and green-mobility. They also offer financial products and schemes for new and emergingRE technologies such as, biofuel, green hydrogen and its derivatives, battery energy storage systems, fuel cells, and hybrid RE projects. They offer a comprehensive suite of financial products and services including various fund-based and non fund-based products. Some of the key fund-based products for RE developers are long-term, medium-term and short-term loans (for projects, manufacturing and equipment financing), top-up loans, bridge loans, takeover financing, and loans against securitization of future cashflows. They also provide line of credit to other NBFCs for on-lending to RE and EEC projects. In addition, they provide loans to government entities and also provide financing schemes for RE suppliers, manufacturers and contractors. The non fund-based products include letter of comfort, letter of undertaking, payment on order instruments and guarantee assistance schemes. Further, they provide consulting services on techno-commercial issues relating to the RE sector. Company has a secured asset base, and 93.41% of the Term Loans Outstanding as of September 30, 2023, has security cover. In addition to the financial products and services, they also have the 50 MW Solar Photovoltaic Project at Kasaragod Solar Park in the State of Kerala. The project generates power which is injected into the grid of Kerala State Electricity Board. The project was fully commissioned in September 2017. As per financial performance, Indian Renewable Energy Development Agency Limited has posted total income / net profits of Rs 2,657.74 Cr / Rs 346.38 Cr (FY21), Rs 2,874.15 Cr / Rs 633.52 (FY22), Rs 3,483.04 Cr / Rs 864.62 Cr (FY23) and Rs 2,320.45 Cr / Rs 579.31 Cr (upto H1 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 5.3 and average RoNW of 14.91% for last three fiscals. Issue is priced at a P/BV of 1.11 as per NAV of 28.8 as on 30.09.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 13.58, 9.95, 8.32 and 7.42 respectively, which looks fairly priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 23 IPOs in last three fiscals. IDBI Capital Markets & Securities Limited : This is 3rd IPO from this BRLM. From last 2 IPOs, one opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 2 IPOs, all are trading above issue price or at par. (As on 15.11.2023) BOB Capital Markets Limited : This is 5th IPO from this BRLM. From last 4 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 4 IPOs, 3 are trading below issue price and remaining above or at par of issue price. (As on 15.11.2023) SBI Capital Markets Limited : This is 18th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, 6 are trading below issue price and remaining above or at par of issue price. (As on 15.11.2023) As per financials, Indian Renewable Energy Development Agency Limited has shown good growth, RoNW is 15.43% and P/E is respectively 13.58, 9.95, 8.32 and 7.42 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks fairly priced. Company is in business of providing financial products and related services for RE ( Renewable Energy ) & other value chain activities. As GoI is focused to promote Renewable Energy, so good growth may be expected for next 3-5 years. Performance of BRLM is poor. So, we give "SUBSCRIBE FOR LONG TERM" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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