IREDA Board Approves ₹5,000 Crore Hike in Borrowing Limit for FY25
State-run Indian Renewable Energy Development Agency Limited (IREDA) announced on Monday, March 17, that its board has approved increasing the borrowing limit by an additional ₹5,000 crore for fiscal year 2024-25.
- The revised borrowing ceiling for FY25 now stands at ₹29,200 crore, up from the earlier limit of ₹24,200 crore.
- According to the company’s filing, the higher borrowing capacity aims to enhance financial flexibility to support expansion plans.
Stock Performance after Announcement
Following the borrowing limit announcement, IREDA shares closed lower by 1.93% at ₹137.15 on the National Stock Exchange.
- The stock’s decline reflected a cautious market sentiment amid volatility, despite positive announcements.
- Notably, IREDA shares recently became eligible for derivatives trading, as they were included in the F&O segment last month.
- Despite Monday’s decline, IREDA shares remain a key interest area for investors, driven by government initiatives in renewable energy financing.
Robust December Quarter Financials
For the quarter ended December 2024, IREDA posted robust financial results with revenue from operations climbing by 36% year-on-year (YoY) to ₹1,698 crore.
- Revenue growth was supported by strong demand for renewable energy financing, consistent loan disbursements, and strategic asset quality improvement measures.
- Revenue from operations notably surged by 36% YoY, reaching ₹1,698 crore against ₹1,248 crore in the corresponding quarter of the previous fiscal year.
- Net profit during the December quarter saw a significant 27% YoY rise, totaling ₹425 crore, reflecting improved asset quality and higher operational efficiencies.
Enhanced Loan Growth and Asset Quality
IREDA recorded substantial growth in loan disbursements and sanctions during the third quarter, signaling strong momentum in its lending activities.
- Loan disbursements during Q3 FY25 jumped impressively by 41% YoY to ₹17,236 crore compared to ₹12,220 crore in Q3 FY24.
- Additionally, loan sanctions surged dramatically, posting a 129% increase at ₹31,116 crore, compared to ₹13,558 crore in the previous year.
- The company’s net non-performing assets (NPAs) marginally improved to 1.50% in Q3 FY25, down from 1.52% in the prior year, underscoring stable credit management.
Strategic Significance of Enhanced Borrowing
The increased borrowing limit reflects IREDA’s intent to bolster its funding capacity for significant renewable energy projects planned nationwide.
- This move aligns with India’s ambitious renewable energy goals and provides financial backing to projects contributing to clean energy transitions.
- A strengthened borrowing program positions IREDA effectively as a pivotal institution facilitating the government’s clean energy objectives.
