According to the IREDA press release, “The issue drew strong investor interest, with total bids worth ₹1,343 crores against the base size of ₹100 crore and a Green Shoe option of ₹400 crores. This resulted in oversubscription by 2.69 times, reflecting growing confidence in IREDA’s role as a leading financier of India’s renewable energy sector.”
Pradip Kumar Das, Chairman and Managing Director, IREDA, said, “These bonds will strengthen our Tier-I Capital and help scale up renewable energy financing, accelerating India’s transition to a greener and more sustainable future.”
Perpetual Bonds have distinctive features, including no fixed maturity or redemption date, and are callable solely at the company’s discretion. They offer a 7.7% annual coupon with a single step-up of 50 basis points after 10 years if not redeemed earlier. Ranking senior only to share capital, these hybrid instruments display equity-like traits while giving IREDA a stable, long-term capital source.
Recently, the government decided to allow the company to raise money through tax-saving 54EC bonds, also known as capital gains bonds.
The Central Board of Direct Taxes (CBDT) had announced in July this year that Ireda’s bonds will now be classified as a ‘long-term specified asset’ under Section 54EC of the Income-tax Act, 1961. As a result, individuals who earn long-term capital gains, such as from selling property, could reduce their tax liability by investing up to ₹50 lakh in these bonds within a financial year.
The funds raised through these bonds will be utilised solely for renewable energy projects that can generate their own revenue to repay loans, without dependence on state governments. For Ireda, this approval signifies access to more affordable funds, which can help enhance financing for clean energy across the country.
The shares of Ireda are likely to be in the spotlight tomorrow.