Ireda eyes overseas lending, borrowing from green funds

Ireda Chairman and Managing Director Pradip Kumar Das said in an interview that the company will provide significant funding for solar panel manufacturing and green hydrogen business in India through its subsidiary Ireda Global Green Energy Finance IFSC Ltd. This will largely meet export demand.

“We have opened the GIFT City office and we need to make it operational. Once it is operational, we will borrow from here and lend from here. The advantage of this is that there will be no need for foreign currency conversion. Indian developers doing projects here will get loans through GIFT City. We will also prefer to lend to Indian promoters doing projects abroad,” Das said, adding that this will help the company make its debut in the international market.

“We will approach green funds and get funding through Gift City so that borrowing will be reduced and hedging costs will be saved. There are several developers doing projects in the country which have export revenues and the capital expenditure is paid in foreign exchange. So, they will invest in foreign exchange and repay us in foreign exchange when they export, mainly to make solar panels and green hydrogen.”

Looking forward to first transaction

The state-owned company set up a subsidiary at the International Financial Services Centre (IFSC) in GIFT City, Gujarat in May this year. The company is yet to make its first transaction through Ireda Global Green Energy Finance IFSC Ltd. Das said Ireda Global Green Energy Finance IFSC Ltd is in talks with several companies for financing. The tie-ups will happen in the next few days.

Many public sector enterprises have set up subsidiaries in IFSC for investment and financing. Power Finance Corporation has already set up a subsidiary, while REC Ltd has also received approval from the Reserve Bank of India (RBI).

Talking about the company’s planned follow-on public issue, the CMD said the Centre is expected to approve the proposed equity dilution soon. He said the company is looking to raise approx. ₹4500-5000 crore from FPOs.

“We will be on the market by the end of this year. We need about ₹4,500-5,000 crore. When we raise equity, the Indian government’s stake will come down. For this, we have requested them to allow us to sell up to 10% stake. It depends on how much the government allows to sell. We hope to get approval soon,” he said on the sidelines of RE Invest 2024, adding that the company may be able to raise more than the target ₹500 billion rupees.

Launched in November last year

The company was listed on the stock exchange in November last year. Bombay Stock Exchange closing price ₹It closed at 227.75 on Tuesday, down 0.22% from the previous closing price.

Regarding the company’s application to the government to include it under Section 54EC of the Income Tax Act, Das said the application is at an advanced stage of discussion with the central government and is expected to be approved within a month. Inclusion of the company under the section will exempt investors who buy bonds from the company from capital gains tax, making their bonds more attractive.

“We may get some results by mid-October because we need to get this before doing the FPO,” he said.

Among other financial institutions and banks, Ireda has also pledged to increase its support for the green transition. It has pledged to provide more ₹The project will reach $5 trillion by 2030. So far, it has undertaken projects worth nearly ₹2 trillion and finance 27 GW of renewable energy capacity.

Energy transition projects financed by the company include 58% traditional renewable energy projects, including solar, wind and hydroelectric power, while emerging sectors such as CNG, ethanol, electric vehicles and charging infrastructure account for 18%. The remaining 24% has been provided to national utilities for their renewable energy projects.