Unlisted shares of IREDA were trading Rs 10 higher in the grey market, which is a 31.25 per cent listing gain from the public issue
IREDA IPO: The initial public offering (IPO) of state-owned Indian Renewable Energy Development Agency (IREDA) has so far received a decent subscription response, with the offer being subscribed 5.76 times till the morning of the last day of bidding on Thursday. Till 11:09 am, the Rs 2,150-crore IPO has received bids for 2,71,38,44,060 shares against 47,09,21,451 shares on offer.
The category meant for non-institutional investors received 10.94 times subscription while the quota for Retail Individual Investors (RIIs) got subscribed 5.28 times. The portion for Qualified Institutional Buyers (QIBs) was subscribed 2.71 times.
On the first day of bidding on Tuesday, November 21, the IPO was fully subscribed 1.95 times.
The IPO allotment will take place on November 29, while the share listing might take place on December 4.
IREDA IPO GMP
According to market observers, unlisted shares of IREDA were trading Rs 10 higher in the grey market as compared with its issue price. The Rs 10 grey market premium or GMP means the grey market is expecting a 31.25 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
The price range for the offer is Rs 30-32 a share.
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IREDA IPO: Should You Subscribe?
Giving ‘subscribe’ recommendation, Sonam Srivastava, founder & fund manager at Wright Research, said, “IREDA’s focus on renewable energy financing is timely, aligning with the global shift towards sustainable energy. As the first government-run company IPO since LIC, it carries a certain credibility. The renewable energy sector’s growth potential is significant, but it’s also subject to policy changes and technological advancements, which could influence IREDA’s performance.”
Atul Parakh, CEO at Bigul, said, “Among five mainboard upcoming IPOs next week, state-run IREDA will be on radar of primary market investors as IREDA IPO is expected to give good listing gains and can also be a long-term investment candidate.”
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About IREDA IPO
The IPO has a fresh issue of up to 40,31,64,706 equity shares and an offer for sale of up to 26,87,76,471 equity shares. The price range for the offer is Rs 30-32 a share. Indian Renewable Energy Development Agency has mobilised Rs 643 crore from anchor investors.
This is the first public issue by a public sector enterprise after Life Insurance Corporation’s IPO in May last year. Proceeds from the fresh issue will be used for augmenting IREDA’s capital base to meet its future capital requirements and onward lending.
The minimum lot size for an application is 460 shares. The minimum amount of investment required by retail investors is Rs 14,720. The minimum lot size investment for NII is 14 lots (6,440 shares), amounting to Rs 2,06,080, and for NII, it is 68 lots (31,280 shares), amounting to Rs 10,00,960.
IREDA is a mini Ratna firm with administrative controls with the Ministry of New and Renewable Energy. The organisation offers a comprehensive array of financial products (fund and non-fund-based) associated services, from project inception to post-completion, for renewable energy projects and related activities like equipment manufacturing and transmission.
SBI Capital Markets, IDBI Capital Markets and Securities and BOB Capital Markets are the managers to the offer. Shares of the company will be listed on the BSE and the NSE.
