Business
IREDA, is a non banking financing company which provides financial assistance to renewable energy projects like power generation, equipment supply and fuel source projects including wind power, solar power, hydro power, biomass.
The Company’s primary sources of funds include domestic and foreign borrowings, internal resources and Government of India support.
Thesis
- Supported by the Indian Government
- Low cost access to funds
- Experienced Management, CMD previously worked in Rural Electrification Corporation
- India to target 500 GW renewable capacity by 2030.
- 30% EV Adoption target
- Business is separate from REC/PFC, hence little competition.
Financials
- Market Cap: 32,000 Crore
- PAT growth of 58%
- Loan book growth of 30%
Anti Thesis
- Stretched Valuation
- Not diversified, fully focused on renewable energy sector.
- Standard Risks of a Government Company
- Interest rate risk, Bad loans risk
Near term triggers to look out for
- Company to get Navratna status soon as per Chief MD
- Launched retail division, focusing on PM KUSUM & Rooftop Solar
- Next quarter earnings.
Sources
- IREDA share price | IREDA: IREDA chief expects navratna status soon, not worried about REC, PFC competition - The Economic Times
- https://www.ireda.in/home
This is what happens when three hot sectors: PSU, NBFC and Renewable Energy meet Image may be NSFW.
Clik here to view.
Disclosure: Lucky to get IPO Allotment, and also accumulated on listing day.
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