IREDA shares fall, investors lose Rs 1,100 crore on NSE’s action

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) fell over 3% in early deals today after NSE, India’s largest stock exchange by volumes and turnover, revoked the inclusion of the renewable energy stock in several key indices due to the firm’s non-compliance with SEBI portfolio concentration norms.

Investor wealth in the firm also shrinked by Rs 1,102 crore in early trade.

IREDA shares fell 3.17% at Rs 125.25 in early deals in Wednesday’s trading session. Market cap of the firm fell to Rs 33,664 crore in the current session against Rs 34,766 crore in the previous session.

IREDA saw 10.84 lakh shares changing hands amounting to a turnover of Rs 13.79 crore on BSE.

In terms of technicals, the relative strength index (RSI) of the stock stands at 37.9, signaling it’s trading neither in the overbought nor in the oversold zone.

IREDA shares are trading lower than the 5 day, 10 day, 20 day, 30 day and 50 day moving averages.

“As IREDA breached one of the requirements of SEBI Portfolio Concentration Norms for Equity Exchange Traded Funds (ETFs) and Index Funds related to impact cost, the committee has decided to revoke its earlier decision to include IREDA announced on February 28, 2024,” said the NSE in a press release.

IREDA was to be included in several indices from March 28, 2024. The indices were Nifty 500, Nifty Midcap 150, Nifty Midcap 100, Nifty 200, Nifty LargeMidcap 250, Nifty MidSmallcap 400, Nifty Total Market and the Nifty500 Multicap 50:25:25 indices.

V-Guard Industries, which was excluded for making place for IREDA stock, will now remain a part of the Nifty 500, Nifty Smallcap 250, and Nifty MidSmallcap 400.

The renewable energy stock surged to its record high of Rs 215 on February 6 this year. Compared to its IPO issue price of Rs 32, the stock had surged 304% till date.

The IREDA stock made its market debut on November 29, 2023. The stock listed at Rs 50, a premium of 56.25% over the IPO issue price of Rs 32.

The IPO was open from November 21 to November 23, 2023. The price band of IREDA’s IPO was Rs 30-32 apiece with a lot size of 460 shares. IREDA posted a 67 per cent rise in net profit to Rs 335.54 crore in Q3, led by growth in the loan book and a significant reduction in net non-performing assets (NPAs) from 2.03 per cent to 1.52 per cent year-on-year.

Revenue from operations in Q3 climbed 44.21 per cent to Rs 1,253.20 crore compared with Rs 868.98 crore in the corresponding quarter last year. The PSU’s loan book surged 33.50 per cent to Rs 50,579.67 crore in Q3 against Rs 37,887.69 crore on a YoY basis.

IREDA is a Mini Ratna (Category – I) government enterprise. It is administratively controlled by the Ministry of New and Renewable Energy (MNRE). IREDA has been actively promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects for over 36 years.