IREDA shares in focus after board clears Rs 2,994 crore QIP fundraising

Indian Renewable Energy Development Agency (IREDA) shares are likely to remain in focus during Monday’s trading session after the company’s board approved a Rs 2,994 crore fund-raising plan through the Qualified Institutions Placement (QIP) route.

The state-run power sector NBFC announced on Friday that it will raise funds by issuing equity shares to qualified institutional buyers in one or more tranches. Importantly, the structure of the issue has been designed to ensure that the Government of India’s shareholding does not dilute by more than 3.76% of the company’s post-issue paid-up equity capital.

The decision was taken at the board meeting held on Friday, February 6, 2026, and the proposed QIP remains subject to shareholder approval and other statutory clearances.

Strong quarterly performance: IREDA reported a solid financial performance for the quarter ended December 2025. Consolidated net profit rose 15.4% year-on-year to Rs 1,381.36 crore. Revenue from operations grew sharply by 28.2% YoY, reaching Rs 6,041.82 crore compared with Rs 4,714.25 crore in the same quarter last year.

For the nine months ended December 31, 2025, the company’s revenue from operations stood at Rs 6,135 crore, registering a 27% YoY growth over Rs 4,838 crore in the corresponding period of the previous year.

Profit before tax (PBT) for the period increased 17% YoY to Rs 1,718 crore, while profit after tax (PAT) rose 15% YoY to Rs 1,381 crore, highlighting steady earnings growth despite market volatility.

According to the company’s investor presentation, IREDA continues to see strong momentum in its lending operations, reflecting healthy demand across the renewable energy sector. During the period, loan sanctions increased 29% year-on-year to Rs 40,100 crore, while loan disbursements recorded an even sharper rise of 44% YoY to Rs 24,903 crore, underscoring sustained traction in project financing activity.

Share price performance

IREDA shares closed 1% lower at Rs 128.60 on Friday on the NSE. The stock has been under pressure for some time, declining about 10% on a monthly basis and nearly 32% over the past year, indicating prolonged underperformance.

On the valuation front, IREDA is currently trading at a price-to-earnings (P/E) ratio of 19.38, a price-to-sales (P/S) ratio of 6.4, and a price-to-book (P/B) ratio of 3.55. While these valuation metrics appear reasonable, the stock’s continued price weakness has kept investor sentiment on the cautious side.

Technically, the stock remains under pressure. The 14-day Relative Strength Index (RSI) stands at 41.6, indicating that the stock is below the neutral zone but has not yet entered oversold territory. Additionally, IREDA is trading below all eight key simple moving averages, signalling a bearish bias in the near term.

IREDA’s QIP announcement, coupled with strong financial and operational growth, is expected to keep the stock in focus. However, persistent technical weakness and recent underperformance may lead to cautious trading sentiment in the short term, even as long-term fundamentals remain intact.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)