The Union Cabinet on Friday approved the listing of Indian Renewable Energy Development Agency Ltd (IREDA) on the stock exchanges through an initial public offering (IPO) through the partial sale of the government’s stake in the public sector entity. .
The objective is to raise funds through the issuance of new capital shares by IREDA, official sources said.
The Department of Investment and Management of Public Assets (DIPAM) will promote the listing process, the sources added.
This decision supersedes the earlier Cabinet Committee on Economic Affairs (CCEA) decision taken in June 2017 which had allowed IREDA to issue Rs 13.90 crore new capital shares of Rs 10 each to the public on the basis of the creation of books via the IPO route.
The immediate decision has been necessitated due to the change in capital structure following the capital injection to the tune of Rs 1,500 crore by the government in March 2022.
The initial public offering will help unlock the value of the government’s investment on the one hand, and on the other hand, it will provide an opportunity for the public to acquire a stake in the national asset and profit from it.
In addition, it will help IREDA to increase a part of its capital requirement to meet growth plans without relying on the public treasury, and it will improve governance through greater market discipline and transparency derived from listing and disclosure requirements.
IREDA is a wholly owned Ratna mini-company dedicated to financing renewable energy and energy efficiency projects in India.
(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated feed.)