IREDA shares at an all-time high after stellar rally, triple wealth of IPO investors

Shares of the Indian Renewable Energy Development Agency (IREDA) gained sharply on Tuesday, continuing its stellar run on the stock market.

IREDA shares hit an all-time high of Rs 102 in early trade, rallying over 16 per cent. At around 11:55 am, the company’s stock was up 16.29 per cent at Rs 98.85. This implies a gain of over 206 per cent compared to its IPO price of Rs 32.

It may be noted that the state-owned financial institution’s shares have witnessed a rally of over 59 per cent in the past five trading sessions. With today’s gain, investors in its IPO have seen their wealth more than triple.

Analysts have recently said the stock has the potential to register further gains in the near term, given its strategic position that can help it capitalise on the rapid growth in the renewable energy sector as India’s sole renewable energy-focused state-owned NBFC.

It’s noteworthy that the government has set an ambitious target of achieving 500 GW of renewable capacity by FY2030E, leading to increased attention and investment in the renewable energy sector.

The company recently introduced a retail division focused on promoting loans for the PM-KUSUM scheme, Rooftop Solar, and other Business-to-Consumer (B2C) sectors.

Outlook remains positive

Despite impressive plans from key players, analysts at Kotak Securities suggest that the execution of renewable capacity addition needs acceleration to meet the target. However, the sector’s positive outlook is maintained due to the upcoming investment cycle.

Technical analysts are optimistic about IREDA stock, citing support around Rs 73.5 and potential resistance at Rs 88.2.

Market experts anticipate the stock to trade within the range of Rs 60 and Rs 85 in the coming months. DRS Finvest founder Ravi Singh predicts a near-term target of Rs 80, recommending a stop loss at Rs 65.

IREDA had a strong market debut with a 56.25 per cent premium over the IPO issue price of Rs 32.

The IPO, with a price band of Rs 30-32, raised a total of Rs 2,150.21 crore, including a fresh share sale of Rs 1,290.13 crore and an offer-for-sale (OFS) of 26,87,76,471 equity shares.

The book running lead managers were IDBI Capital Markets, BoB Capital Markets, and SBI Capital Markets. IREDA is administratively controlled by the Ministry of New and Renewable Energy (MNRE).

Published By:

Koustav Das

Published On:

Dec 12, 2023

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