Cabinet Approves Issue of Fresh Equity Shares

Chaired by Prime Minister Narendra Modi, the Cabinet Committee on Economic Affairs has given its approval for an  issue 13,90,00,000 fresh equity shares of Indian Renewable Energy Development Agency (IREDA) of Rs.10 each to the public on book-building basis through the IPO.
 
It approved an issue of shares to retail investors and IREDA employees at a discount of 5% on the issue price of each equity share on book-building basis, with a cap of 0.5% on equity post issue for CPSE employees. The allocation to retail investors in the net offer will not be less than 35%, as per the ICDR, 2009.However, the number of shares proposed to be issued to employees and retail investors will be finalized in consultation with the lead managers and as per the SEBI regulations and conduct book building process for the said IPO by MNRE / IREDA through Book Running Lead Manager (BRLM) as per the guidelines of Department of Investment and Public Asset Management (DIPAM) and as per guidance of the Inter-Ministerial Group.
 
The Public issue of equity will enable IREDA to increase its equity base which will help them raise more debt resources for funding RE projects, as per a GoI's official release and will also enable it to increase its visibility in domestic and international financial markets apart from unlocking its true value.  IREDA, being the premier institution for RE Sector, will be required to raise equity funds to leverage loan financing for RE Sector.

IREDA has to cater to the increasing needs of the sector to sustain its contribution to the Renewable Energy Sector. The RE targets have been scaled up to 175 GW by the year 2022, by the Government of India. To achieve this ambitious target, substantial investments in RE sector will be required in order to achieve this target.