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The Indian Renewable Energy Development Agency (IREDA) is set to raise between INR 2,500 crore and INR 3,000 crore through a Qualified Institutional Placement (QIP) this fiscal year. This fundraising initiative aims to significantly boost IREDA's lending capacity to INR 30,000 crore, enabling it to further support India's ambitious renewable energy projects. A recent policy change, designating IREDA's bonds as 'long-term specified assets' for capital gains tax exemption, is expected to reduce the company's cost of capital and enhance its market appeal, reinforcing its crucial role in the nation's green energy transition.
The Indian Renewable Energy Development Agency (IREDA), a state-owned financier for renewable energy projects, is planning a significant fundraising initiative this fiscal year. The agency intends to raise between INR 2,500 crore and INR 3,000 crore through a Qualified Institutional Placement (QIP). This move follows a successful Initial Public Offering (IPO) in December 2023 and is expected to further dilute the government's stake in the company by 3.76 percent. Advertisement
The primary objective behind this substantial fundraising effort is to significantly boost IREDA's lending power, aiming to increase its capacity to INR 30,000 crore. This enhanced financial capability will enable IREDA to provide crucial support to a greater number of renewable energy projects across India, aligning with the nation's ambitious clean energy targets.
IREDA has demonstrated robust financial performance. Its loan book has surged to INR 79,941 crore, and its net worth has increased by 36 percent, reaching INR 12,402 crore. The company has also shown resilience in its portfolio management, having recovered over INR 100 crore from its exposure to Gensol Engineering, a company that faced recent financial challenges.
A significant policy boost for IREDA's financial standing came with the notification of its bonds as 'long-term specified assets' under Section 54EC of the Income-tax Act, 1961. This provision, effective from July 9, 2025, allows investors in these bonds to claim capital gains tax exemption, thereby making IREDA's bonds more attractive and potentially reducing its cost of capital. This favorable policy change is expected to enhance IREDA's ability to raise funds more efficiently from the market.
The company anticipates continued robust growth in its loan book. This optimism is driven by India's aggressive targets for renewable energy capacity addition, particularly the national goal of achieving 50 percent of its total power capacity from green sources by 2030. IREDA plays a pivotal role in facilitating this transition, acting as a key financial enabler for the renewable energy sector's expansion.
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