IREDA Stock Skyrockets to Record High, Up 364% in a Year

12 Jul 2024 , 10:44 AM

On July 12, shares of the Indian Renewable Energy Development Agency (IREDA) rose more than 6% to a new record high of ₹303.70, ahead of the company’s fiscal first quarter results. Investors anticipate that the company will announce good growth numbers in Q1FY25, after the positive provisional business results.

In the previous session, the stock rose more than 17% to a new record high of ₹289.33 on the National Stock Exchange (NSE), before closing 12% higher at 278.95.

In its Q1FY25 business update, released late last month, IREDA stated that loan sanctions totaled ₹9,136 Crore in the June quarter, an increase of 382.62% year on year. The PSU’s loan disbursements for the quarter totaled ₹5,320 Crore, up 67.61% year on year.

The outstanding loan book amounted at ₹63,150 Crore, up 33.77% from ₹47,207 Crore a year before.

Foreign investors have expressed interest in the stock. Foreign portfolio investors (FPIs) boosted their shareholding of the company to 2.7% in the quarter ending June 30, up from 1.36% the previous quarter. However, despite this increase, no major shareholder owns more than 1%.

The number of small shareholders increased during the April-June period, with 22.15 lakh shareholders holding less than ₹2 lakh worth of shares, up from 21.23 lakh in the March quarter.

Domestic mutual funds, on the other hand, cut their interest in the company, preferring to collect profits as the stock rose to new highs. As of June 30, mutual funds owned 0.24% of IREDA, down from half a% at the end of March 2024.

IREDA shares has piqued investors’ interest after receiving ‘Navratna’ status. Furthermore, the government’s increased attention on the renewable energy industry, in which IREDA is a prominent player, has contributed to the stock’s spectacular climb.

In Q4FY24, IREDA reported a net profit of ₹337.37 Crore, representing a 33% YoY rise. The quarter saw the company’s greatest loan disbursement in its history, with its loan book growing to ₹59,698 Crore, up 26.81% year on year.

The public sector corporation also recorded all-time high annual loan sanctions of ₹37,353 Crore and disbursements of ₹25,089 Crore in FY24, representing a 14.63% and 15.94% increase, respectively.

IREDA went public in November last year, with shares priced at ₹32 each. The shares made a strong beginning, trading at a 56.25% premium to the IPO issue price.

So far this year, IREDA stock is up 166%, more than tripling investors’ money. Currently, the multibagger PSU stock is trading 771% over its issue price.

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