IREDA zooms 14% on high volumes as circuit filter changed to 20% from 5%

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) jumped around 14 percent on high volumes on April 5. The sharp rally comes after the BSE revised the circuit filter for the company upwards from 5 percent, and the revised price band came into effect on the day.

The IREDA shares will now have a circuit filter of 20 percent, meaning they can rise or fall to a maximum extent of 20 percent for a trading session.

Note that after hitting the circuit limit in either direction, trading in the stock is halted, depending upon the time at which the stock hits the circuit.

However, bids in opposite directions can break the circuit. In the past one week, the stock of state-owned financial institution has zoomed 32 percent as the company posted record loan growth for FY24.

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The PSU said that it has recorded the highest-ever loan sanctions worth Rs 37,354 crore in FY24, while loan disbursements came in at Rs 25,089 crore. Its total loan book stood at Rs 59,650 crore, recording a growth of 26.71 percent YoY.

Loans sanctioned surged 101.71 percent on-year to Rs 23,796 crore during the March 2024 quarter.

At 2pm, IREDA shares were trading 12.9 percent higher at Rs 178.65 on the National Stock Exchange (NSE). The total market capitalisation of the company surged to over Rs 48,200 crore.

So far in the day, a total of 14 crore IREDA shares have changed hands on the BSE and NSE combined, compared to the one-month average trading volume of 3 crore shares.

Indian Renewable Energy Development Agency, incorporated in March 1987, is a ‘miniratna’ public limited government company, administratively controlled by the Ministry of New and Renewable Energy (MNRE).

It provides financial assistance and other services to projects related to renewable sources of energy and energy efficiency/conservation.

The company launched its IPO in November 2023 and raised a total of Rs 2,150.21 crore through the initial stake sale. The company sold its shares for Rs 32 apiece and the stock listed at Rs 49.99, a premium of 56 percent over its issue price. Since the listing, the stock has delivered multibagger returns of around 256 percent.

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Earlier this year in February, the government in its Interim Budget announced Pradhan Mantri Suryodaya Yojana (PMSY), a new rooftop solar scheme targeting 10 million households. Elara Securities sees this scheme as a funding opportunity of Rs 25,000 crore, mainly benefiting power finance companies.

The brokerage picked IREDA as one of the top beneficiaries. The favourable macroeconomic scenario is also anticipated to be advantageous for the company.

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