In our recent article about the expectation of future energy demand , we saw that the energy demand is expected to rise 2.5 times by 2047. So, it is sure that there is a requirement of huge capital in order to set an energy generation plant to meet such a increasing power demand. Now with heat waves across the country, the energy demand has surged a lot. In India, growing number of industries and other businesses is also a reason for the surge expected in energy demand.
Now we have to understand that it not possible for a company to fund the expansion by its own capital. It will definitely require funds from an external source. Here comes the role of IREDA.
Outlook of the company:
Indian Renewable Energy Development Agency Ltd. is a listed public Navaratna company. It is a government company under the administrative control of the Ministry of New and Renewable Energy [MNRE]. It is a non banking finance company [NBFC] which was established in 1987.
The main objective of the company is to provide financial support for the specific projects and schemes for generating energy through new and renewable sources, and conserving energy through energy efficiency.
Last year [2023], the company was classified as 'Infrastructure Finance Company'. The company is not only engaged in financing the capex requirements of the companies, but also for ordinary citizens of the country also. Under the PM-KUSUM Scheme, the company provides financial support for installation of roof top solar.
Now let us jump into the fundamentals of the company to know more about its stock performance and expectations.
Fundamentals of the company:
The company made its debut in stock market in November 2023. The IREDA ipo price was at Rs. 35 but listed at a premium of 87.5% at Rs. 60 per share. It is currently traded at Rs. 181 per share as on 29th April.
- ROCE: 9.35%
- ROE:17.3%
- Stock P/E: 38.9
- Industry P/E: 17.2
- RSI: 66.6
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