Economy

IREDA to go public: Govt approves listing on stock exchanges

The Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, has approved the Initial Public Offer (IPO) of Indian Renewable Energy Development Agency (IREDA), a Mini-ratna public sector enterprise. The IPO will involve a partial sale of government’s stake in the company and the issuance of fresh equity shares. The Department of Investment and Public Asset Management will oversee the listing process.

Unlocking Value for Government and the Public

IREDA’s IPO will help unlock the value of government’s investment in the company, while also giving the public an opportunity to acquire a stake in a national asset. Additionally, the listing will enable IREDA to raise capital to meet its growth plans without relying on public funding. The listing will also enhance governance and transparency through the required disclosures and listing requirements.

IREDA’s Role in Achieving Renewable Energy Targets

IREDA, established in 1987, is involved in financing renewable energy and energy efficiency projects in India. The company is a Non-banking Financial Company registered with the Reserve Bank of India. The Indian government has set the target of achieving 175 GW of installed renewable energy capacity by 2022 and 500 GW by 2030 as part of its Nationally Determined Contribution in the Paris Accord on Climate Change. IREDA has a critical role to play in achieving these targets.

Impact on Employment Opportunities

IREDA’s business plan for renewable energy and energy efficiency projects in line with the Indian government’s targets will create direct and indirect employment opportunities for skilled and unskilled workers. The implementation and operation of these projects will contribute to the growth of the renewable energy sector in India, providing a sustainable future for the country.

Supersedes Earlier Decision

The current decision supersedes an earlier decision taken by the Cabinet Committee on Economic Affairs in June 2017, which allowed IREDA to issue fresh equity shares to the public on book building basis through IPO. This latest decision was necessitated by the change in capital structure following the government’s infusion of capital worth Rs. 1500 crore in March 2022.

The approval of IREDA’s listing on the stock exchange through an IPO is a positive move that will unlock the value of the government’s investment, allow the public to acquire a stake in a national asset, and help IREDA raise capital for growth plans. This decision will also improve governance through greater market discipline and transparency. IREDA has a crucial role to play in achieving India’s RE targets, and the implementation of their Business Plan will create employment opportunities for skilled and unskilled workers.

 

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