IREDA’s Q2 Financial Performance Shows Significant Growth Amidst Stable Asset Quality

The Indian Renewable Energy Development Agency (IREDA) Ltd., a government-run entity, disclosed its financial results for the September quarter on Thursday, October 10, highlighting substantial growth in key financial metrics. The company observed a significant rise in its Net Interest Income (NII), which surged by 51.9% to ₹547 crore compared to ₹360 crore in the same period of the previous year.

Net profit for the quarter ended September 30, 2024, saw an ascent of 36% year-on-year, reaching ₹387 crore from ₹284 crore recorded in the corresponding quarter of the previous fiscal year. This figure also marks a slight improvement from the ₹383 crore net profit reported in the June quarter of 2024.

In terms of asset quality, IREDA maintained stability, with its Gross Non-Performing Assets (NPA) remaining consistent at 2.19%. However, the Net NPA experienced a minor increase to 1.04% from 0.95% in the preceding quarter. The renewable energy financier’s debt-equity ratio marginally adjusted to 5.85x from 5.83x seen in the June quarter.

The first half of the fiscal year reflected a remarkable 303% increase in loan sanctions, amounting to ₹17,860 crore, compared to ₹4,437 crore in the same half of the previous year. Disbursements also increased by 56%, with loans disbursed totaling ₹9,787 crore as opposed to ₹6,273 crore a year earlier, and the loan book outstanding swelled to ₹64,500 crore.

Furthermore, IREDA’s shareholding pattern showed an enhanced interest from retail investors, with ownership rising to 19.88% by the end of the September quarter, up from 18.59% in the previous quarter. There was also an increase in the number of retail shareholders, growing from 22.15 lakh to 25.86 lakh over the same period.

The company’s market performance revealed an end-of-day increase of 0.7% in share price to ₹232.7 on Thursday, following a peak of ₹310, which was nearly a tenfold increase from its IPO price of ₹32. As of the latest closing, the stock has decreased by nearly 30% from its peak.

Looking to the future, IREDA has plans to raise up to ₹4,500 crore predominantly through an institutional share sale, with the timeline of the fund raising expected to become a focal point during the earnings call.