IREDA : strategic importance to the GoI for the promotion and development of the RE sector in India

  • IREDA : strategic importance to the GoI for the promotion and development of the RE sector in India

  • Sovereign ownership and strategic importance to GoI 
    • IREDAis a 71.76% GoI-owned entity and is of strategic importance to the GoI for the promotion and development of the RE sector in India as on June 30, 2025. 
    • Thus, the ratings factor in the Sovereign ownership and strategic importance of the company. GOI infused equity of Rs. 1,500 Cr. in March 2022. 
    • IREDA is a strategically important entity and was set up by GoI under the administrative control of Ministry of New and Renewable Energy (MNRE) to promote, develop and extend financial assistance for RE and EE projects. 
    • IREDA has been instrumental in implementing several schemes of the MNRE. 
    • IREDA receives benefits of being a government owned entity in the form of GoI guarantees for its overseas bond issuances and borrowing from multilateral agencies. 
    • AcuitΓ© believes that IREDA will continue to benefit from its established presence in the RE sector and the strategic role it plays as the nodal agency for promoting, developing and financing renewable energy (RE) and energy-efficiency (EE) projects in India. 
  • Diversified borrowing profile and comfortable liquidity profile 
    • IREDA being a government owned entity has been able to raise funds at competitive costs, both in international and domestic markets. 
    • The average cost of funds stood at 7.61% during FY25, which compares well with other public financial institutions. 
    • It has a well-diversified borrowing profile with access to funding via Bilateral FI’s, Bonds, Domestic Bank, Domestic FI, Multilateral FI and NCEF. 
    • The foreign currency debt is from multilateral agencies like Japan International Cooperation Agency (JICA), Kreditanstalt fur Weideraufbau (KfW), the Asian Development Bank (ADB), the World Bank, the European Investment Bank (EIB), the Nordic Investment Bank (NIB),etc.,and has afairly long tenure (tenor of 10-40 years), which augurs well for IREDA’s liquidity profile. 
    • AcuitΓ© believes, going forward, the ability of the company to mobilise additional lower cost funding through debt/ sub debt and its ability to deploy the funds profitably will be a key rating monitorable. 
    • Growth in loan portfolio and disbursements IREDA’s loan portfolio increased to Rs. 76,281.65 Cr. as on March 31, 2025, from Rs 59,698.11 cr. as on March 31, 2024. Further, the AUM has grown to Rs. 79,941.45 Cr. as on June 30, 2025. 
  • Improvement in loan portfolio is driven by higher disbursements. 
    • The company reported disbursements of Rs 30,167.87 Cr. during FY 2024-25 (Rs. 25,089.04 Cr. during FY2023-24). 
    • The disbursements during FY25 consists of segments like loan facility to state utilities - discom (31%), solar (21%), ethanol (10%), Hydro Power (7%) and others (31%). 
    • The disbursements during Q1FY2026 stand at Rs. 6,980.49 Cr. 
    • AcuitΓ© believes that going forward the ability of the company to maintain the growth momentum in AUM will be key rating sensitivity.

IREDA Posts 67% Growth in Net Profit but stock is down 30% from top 

https://youtu.be/h1R5lOOXIGw?si=xIs7_tOl0HPid6fC


Key financial highlights for Q3, FY 2023-24 compared to Q3, FY 2022-23 are as follows: 

  • Profit After Tax: ₹ 335.54 crores as against ₹ 200.75 crores (up by 67.15%) 
  • Revenue from Operations: ₹ 1,253.20 crores as against ₹ 868.98 crores (up by 44.21%) 
  • Loan Book: ₹ 50,579.67 crores as against ₹ 37,887.69 crores (up by 33.50%)
  • Net-worth: ₹ 8,134.56 crores as against ₹ 5,591 crores (up by 45.49%) 
  • Net NPAs: 1.52% as against 2.03% (reduction by 25% in percentage terms) 
  • Gross NPAs: 2.90% as against 4.24% (reduction by 31.70% in percentage terms)

 Thank you for contacting Rounaq! Please let us know how we can help you. 

Whatsapp: 7838491131

SEBI registered RA : Rounaq Bakshi
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