Indian Renewable Energy Development Agency (IREDA) shares surged over 12% in early trade on Monday after the government granted it ‘Navratna’ status.
This prestigious recognition was communicated by IREDA through an official filing with the exchanges, following the receipt of a letter from the Department of Public Enterprises on April 26, 2024.
IREDA’s shares rose over 12% today to reach Rs 192 in early trade, marking a big increase from the previous trading session’s closing price of Rs 170.65.
At around 10.21 am, shares of the company were up 7.32% at Rs 183.15 on the Bombay Stock Exchange (BSE).
IREDA conducted its IPO in November 2023, raising a total of Rs 2,150.21 crore.
Priced at Rs 32 per share, the stock has demonstrated remarkable performance since its listing, delivering a return of 500% from its issue price and currently standing at a 285% increase from its listing price of 49.99.
In its recent financial report for the quarter ended March 31, 2024, IREDA showcased robust performance, with a net profit of Rs 337.38 crore, marking a 33.03% increase compared to the same period last year.
Additionally, net interest income (NII) saw significant growth, reaching Rs 481.4 crore, a 35.1% increase from the corresponding quarter of FY23.
IREDA, established in March 1987, operated as a ‘miniratna’ public limited government company under the administrative control of the Ministry of New and Renewable Energy (MNRE).
What is a ‘Navratna’ status?
The government grants Navratna status to Public Sector Undertakings (PSUs).
This empowers them to undertake investments of up to Rs 1,000 crore without requiring approval from the central government.
These companies are allowed to invest up to 30% of their net worth within a year, provided they stay within the Rs 1,000 crore limit.
To qualify for Navratna status, firms must already hold the designation of miniratna category I and be listed under Schedule A of Central Public Sector Enterprises (CPSEs).
According to analysts, it is a positive development for the company.
IREDA has seen strong returns, with over a 76% increase so far thus year and a one-year return of 207% on its stock.
In its recent financial report for the quarter ended March 31, 2024, the company recorded a 33% rise in consolidated net profit to Rs 337 crore compared to Rs 254 crore in the previous year.
Additionally, the company’s board approved the establishment of a subsidiary to serve the retail business in renewable energy (RE) and emerging sectors such as PM KUSUM and rooftop solar.
Furthermore, IREDA achieved its highest-ever annual loan sanctions and disbursements in the fiscal year 2023-24.
