IREDA, a specialized non-banking finance company focused on funding renewable energy projects in India, got listed on the stock exchanges in 2021. The IPO saw good interest from investors valuing the positive long-term growth prospects of IREDA and India’s booming renewable energy sector.
However, after a lackluster stock market debut, IREDA’s share price has remained muted over the last year. This has left many investors wondering – Does IREDA have strong growth potential in the coming years? What could be the possible share price targets by 2025, 2030 onwards? Let’s analyze.
IREDA Company Business Overview
IREDA is a Non-Banking Financial Company (NBFC) established in 1987 under the administrative control of the Ministry of New and Renewable Energy (MNRE), Government of India. It is a Public Limited Government Company registered as an NBFC with the Reserve Bank of India.
IREDA was set up to promote, develop, and extend financial support for India’s renewable energy and energy efficiency/conservation projects.
Key Functions & Business Areas of IREDA
- IREDA provides term and working capital loans for renewable energy projects like solar, wind, small hydro, biomass, etc.
- It also finances energy efficiency and conservation projects and environmental projects like waste-to-energy.
- IREDA extends loans for the purchase of renewable energy technologies and equipment.
- It promotes renewable energy through consultancy services and creating awareness.
- IREDA raises funds through market borrowings, and lines of credit from bilateral/multi-lateral agencies to on-lend for eligible projects.
Let’s understand in Simple terms
What they do:
- Offers a wide range of financial products and services for renewable energy projects, including:
- Loans and credit lines for various stages of project development.
- Guarantee assistance for renewable energy suppliers and developers.
- Direct subsidy discounting for solar water heating systems and GBI claims.
- Factoring schemes for purchasing receivables of solar power developers.
- Advisory services and capacity-building initiatives.
So in summary, IREDA primarily works as a specialized non-banking finance institution focused on the renewable energy sector in India. It provides funding support as well as technical & promotional services.
Impact and Achievements of IREDA
- IREDA has played a key role in facilitating India’s impressive growth in renewable energy capacity. As of September 2023, it has sanctioned loans exceeding INR 1 lakh crore (USD 12.5 billion) and supported over 8 GW of renewable energy projects.
- Recently achieved a significant milestone with the successful initial public offering (IPO) in November 2023, further strengthening its financial stability and growth potential.
- Actively involved in promoting energy efficiency and environmental technologies for sustainable development.
India aims to have 450 GW of renewable energy capacity by 2030 as part of its climate change commitments. This requires massive investments of around $500-700 billion. As the premier financing institution dedicated to funding green energy projects, IREDA is ideally positioned to benefit from this exponential growth.
Many market experts predict that IREDA’s loan book and profits could grow annually for the next 5-7 years. This rapid growth beyond 2025 can potentially reflect handsome returns for early investors.
| IREDA Share Price Target | Price |
| IREDA Share Price Target 2025 | ₹150 |
| IREDA Share Price Target 2026 | ₹162.76 |
| IREDA Share Price Target 2027 | ₹176.40 |
| IREDA Share Price Target 2028 | ₹205.4 |
| IREDA Share Price Target 2029 | ₹231.34 |
| IREDA Share Price Target 2030 | ₹264.43 |
Conclusion
Of course, these future price targets have execution risks around the renewable energy adoption pace in India. But early investors buying IREDA shares even at current levels could make strong returns over the 2025-2040 timeframe going by projected growth trends. For those with a high-risk appetite, IREDA remains a solid emerging NBFC play for riding India’s green energy wave over the next decades.
This article is for Educational purpose .Do not invest on behalf of information provided in the article. Please consult an expert before making decisions We are not SEBI registered advisor .