IREDA shares decline despite strong Q2 performance; loan disbursements rise 56%

The Indian Renewable Energy Development Agency (IREDA) saw its share value dip, falling over 1% to ₹232, despite a robust second-quarter performance. This decline came as a surprise, given the company's significant progress in its loan book and disbursements.

Second-quarter loan performance sees significant growth

For the quarter ending in September, IREDA's sanctioned loans experienced a dramatic 303% increase compared to the previous year. The company approved ₹17,860 crore in loans, up from ₹4,437 crore during the same period in 2022. This jump demonstrates the company's focus on scaling its renewable energy initiatives and maintaining its position in the market. Investors considering buying shares online might view this as a positive long-term indicator despite the current dip.

Increased loan disbursements highlight the company's expansion

IREDA's loan disbursements also rose notably, with a 56% increase from the same quarter last year. The public sector unit disbursed ₹9,787 crore in loans, compared to ₹6,273 crore in 2022. This reflects the company's expanding operations and commitment to supporting renewable energy projects across India.

Government stake dilution on the horizon

In parallel, IREDA has received approval from the Department of Disinvestment and Public Asset Management (DIPAM) for a fresh equity issue. This could result in up to a 7% dilution of the government’s current 75% stake in the company. This development may open new opportunities for individuals looking to buy shares online as the market prepares for further investment options in the renewable energy sector.

Strong profit growth and reduced non-performing assets

In the initial quarter of FY 2024-25, IREDA recorded a net profit increase of more than 30%, amounting to ₹383.69 crore. This was driven by higher revenues and stronger financial performance overall. Furthermore, the company successfully reduced its net non-performing assets (NPAs) from 1.61% in the same quarter of FY 2023-24 to just 0.95% in FY 2024-25, indicating improved asset quality.

Market reaction to share performance

Despite these strong financial metrics, IREDA shares were trading at ₹233 at 9:20 am on the NSE, down by 1% from the previous close. While this might concern short-term traders, investors considering buying shares online should note the 128% rise in IREDA's share value since the start of the year, signalling long-term growth potential.

Key takeaways

• IREDA's shares dipped by over 1% to ₹232 despite positive second-quarter performance.
• Sanctioned loans increased by 303%, and loan disbursements rose by 56%.
• The company plans a fresh equity issue, potentially diluting up to 7% of the government’s stake.
• Net profit grew by 30%, with NPAs significantly reduced.
• IREDA shares have risen by 128% since the start of 2024, making it an attractive option for those looking to buy shares online.