IREDA's Strategic QIP Move Amidst Gensol Engineering Crisis

State-owned Indian Renewable Energy Development Agency (IREDA) plans to raise Rs 2,500-3,000 crore through a qualified institutional placement (QIP) this fiscal year, following a successful Initial Public Offering (IPO) in December 2023. This move will see the government dilute another 3.76% of its holdings in the company, according to Pradip Kumar Das, IREDA Chairman and Managing Director.

The company revealed a Rs 700 crore exposure to financially troubled Gensol Engineering and has recouped over Rs 100 crore through various means, including bank guarantees and fixed deposit withdrawals. The National Company Law Tribunal's Ahmedabad bench is processing insolvency proceedings against Gensol, initiated by IREDA. In April, Sebi banned Gensol and its promoters from securities markets amid governance lapse allegations.

Last month, IREDA raised Rs 2,005 crore through a QIP, leading to a 3.24% government stake dilution. Das shared plans for a second tranche within this fiscal, aiming to boost borrowing capacity by Rs 30,000 crore. This strategic financial maneuver targets optimal equity and borrowing costs as the company focuses on solar, wind, and green technologies growth.

(With inputs from agencies.)