IREDA shares tumble 8.5% as F&O trading begins, down 51% from peak

Shares of Indian Renewable Energy Development Agency (IREDA) tumbled over 8 percent in intra-day trade on Friday, February 28, as the stock began trading in the Futures & Options (F&O) segment with the start of the March series. This decline follows a 4 percent drop in the previous session, bringing the stock’s total fall to 25 percent in February—its steepest monthly decline since listing in December 2023.

Stock Performance and Historical Trends

IREDA shares hit a day’s low of ₹151.55 on Friday, marking a sharp 8.5 percent decline. The stock has now fallen more than 51 percent from its post-listing high of ₹310, reached on July 15, 2024. Despite this correction, IREDA has still gained 11.5 percent over the past year.

After debuting at an IPO price of ₹32, the PSU stock surged to ₹214 within days, before retracing to around ₹100 in March 2024. The stock then saw a significant rally between March and July 2024, nearly tripling in value to an all-time high of ₹310. At its peak, the stock had surged nearly 10 times its IPO price.

Recent Developments

IREDA shareholders recently approved a ₹5,000 crore fundraising plan through a Qualified Institutional Placement (QIP), which will result in up to a 7 percent dilution of the government’s stake post-issuance. Additionally, amendments to the company’s Articles of Association were approved following the company’s recent elevation to Navratna status.

On the earnings front, IREDA reported a strong Q3 performance, with net profit rising 27 percent year-on-year to ₹425 crore, supported by a 36 percent increase in revenue to ₹1,698 crore. The company also benefited from a reduction in its cost of borrowing, which declined to 7.68 percent from 7.82 percent a year ago, while its net interest margin expanded to 3.33 percent during the quarter.

Total expenses for Q3FY25 rose 33.8 percent to ₹1,160.78 crore. Meanwhile, the company’s gross non-performing assets (NPAs) improved, declining to 2.68 percent from 2.90 percent in the same quarter of the previous year.

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