Last updated: Dec 12, 2023 1:09 PM IST
IREDA shares hit a 52-week high
Shares of Indian Renewable Energy Development Agency (IREDA) hit a new 52-week high; Should you buy, sell or hold?
IREDA share price NSE, BSE: Shares of Indian Renewable Energy Development Agency (IREDA) hit a fresh 52-week high on Tuesday i.e. December 12.
With Tuesday's move, the stock has now tripled from its IPO price of Rs 32 after touching an intraday high of Rs 102.02.
The stock has tripled from its IPO price within just ten days of listing. The stock had gone public on November 29 and ended up 87.5 percent higher than the issue price.
IREDA's IPO was the first PSU IPO after LIC in May last year. The issue was subscribed nearly 40 times, making it the seventh most subscribed PSU IPO of the decade.
In the ten trading days since listing, IREDA shares have fallen only twice. The stock finished 10 percent higher on Friday, ahead of Monday's 20 percent gain.
With Tuesday's surge, IREDA's market capitalization also crossed the Rs 25,000 crore mark.
23 crore shares of IREDA have already changed hands during Tuesday's trading session, compared to 21 crore shares on Monday and 26 crore shares on Friday.
Soon after its inauguration, IREDA's retail division quickly approved its first loan of Rs 58 crore under the KUSUM-B scheme.
IREDA was the first public sector company to enter the capital market in over a year, following the debut issue of the Life Insurance Corporation of India in May 2022. The energy financier's asset book is mainly dominated by solar (30 percent ), followed by wind energy. (20.9 percent), state-owned utilities (19.2 percent) and hydropower (11.5 percent).
Besides subscribing to the IPO on the back of listing gains, analysts had recommended investing in the stock for the long term, taking into account Indian government initiatives to promote the renewable energy sector. Although the stock has very few chart positions, having only listed on November 29, some investors are hopeful that it will continue to reach new highs.
The rally has made valuations expensive compared to peers such as PFC and REC, but the growth prospects of IREDA's loan portfolio are stronger, analysts believe.
According to Nirmal Bang, diversification and expansion of emerging green technologies such as green hydrogen, hydroelectric power plants, battery storage value chain and green energy corridor provide scope for longer-term sustainability of high loan portfolio growth.
IREDA registered a CAGR growth of 58 percent in net profit during FY21-FY23. The capital risk-weighted asset ratio (CRAR) stood at 21.22 percent as of March 31, 2022, 18.82 percent as of March 31, 2023 and 20.92 percent as of September 30, 2023.
