1. At a Glance
IREDA is the Government of India’s flagship green financing NBFC. Think of it as the SBI of renewables—only leaner, cleaner, and possibly meaner (depending on interest rates). With ₹7,179 Cr revenue and 51% 5Y profit CAGR, it’s the PSU making ESG look sexy.
2. Introduction with Hook
If SBI, REC, and Power Finance Corp had a millennial cousin who only drinks kombucha and funds solar parks—IREDA would be it.
- FY25 Net Profit: ₹1,699 Cr
- Loan Book: ₹78,149 Cr
- 5Y Profit CAGR: 51.3%
- ROE: 18%
- Current P/E: 28.8x
One problem: it’s trading 4.19x its book value. That’s PSU pricing meets startup valuations.
3. Business Model (WTF Do They Even Do?)
| Business Segment | Activity |
|---|---|
| Green Lending | Project financing for solar, wind, hydro, bioenergy, and energy efficiency |
| Infra Lending | Renewable infra support (transmission, storage, hybrid energy) |
| Manufacturer Support | Loans to RE equipment manufacturers, EPCs |
| 54EC Bonds (NEW) | I-T Act compliant capital gains bonds for RE investors (launched Jul 2025) |
| Status | Navratna + Infrastructure Finance Co. (IFC) + PFI tag |
In short: IREDA is your friendly neighborhood green loan shark.
4. Financials Overview
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | Net NPA (%) |
|---|---|---|---|---|
| FY21 | 2,655 | 346 | ₹4.42 | 2.03% |
| FY22 | 2,860 | 634 | ₹2.77 | 1.66% |
| FY23 | 3,483 | 865 | ₹3.78 | 1.61% |
| FY24 | 4,965 | 1,252 | ₹4.66 | 1.04% |
| FY25 | 6,742 | 1,699 | ₹6.32 | 0.95% |
| TTM | 7,179 | 1,562 | ₹5.77 | 1.50% |
Net NPAs < 1% and profit growing like a sugarcane field on steroids.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹160 |
| EPS (TTM) | ₹5.77 |
| P/E | 28.8x |
| Book Value | ₹38.2 |
| Price / Book | 4.19x |
| ROE | 18% |
EduInvesting FV Range™
- Peer P/E Benchmark (PFC, REC): ₹90 – ₹120
- Infra/NBFC adjusted DCF: ₹95 – ₹130
- EduInvesting FV Range™: ₹95 – ₹125
Current price of ₹160 is…a little overcharged. Renewable, yes. Reasonable? Not quite.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 PBT: ₹305 Cr, Revenue: ₹1,947 Cr
- QIP Raised: ₹2,006 Cr (July 2025)
- 54EC Tax Bonds Approved – new fundraising weapon
- Loan Book at ₹78,149 Cr, growing >20% YoY
- Promoter stake reduced to 71.76% (from 75%)
Green bonds, green profits, green flags… and one red flag (valuation).
7. Balance Sheet
| Year | Equity (₹ Cr) | Reserves (₹ Cr) | Borrowings (₹ Cr) | Total Assets (₹ Cr) |
|---|---|---|---|---|
| FY21 | ₹785 | ₹2,211 | ₹24,000 | ₹30,293 |
| FY23 | ₹2,688 | ₹5,872 | ₹49,687 | ₹62,600 |
| FY25 | ₹2,688 | ₹7,578 | ₹61,936 | ₹79,734 |
- Book size ballooning. Equity flat—raising via bonds and QIPs.
- D/E is high—but that’s the business model.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | -₹12,343 | -₹17 | ₹12,368 | ₹7 |
| FY24 | -₹11,100 | -₹23 | ₹11,059 | -₹64 |
| FY25 | -₹14,461 | -₹543 | ₹14,960 | -₹44 |
Operating cash flows = extremely negative.
Survival = purely due to bond market and government guarantees.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE (%) | 18.0% |
| ROCE (%) | 9.57% |
| Debt/Equity | ~8x |
| Interest Coverage | Low-ish |
| Net NPA (%) | 0.95% |
Solid profitability, but thin safety margin. This NBFC runs on tight rope.
10. P&L Breakdown – Show Me the Money
| Metric | FY25 (₹ Cr) |
|---|---|
| Revenue | ₹6,742 |
| Interest Exp. | ₹4,141 |
| Other Exp. | ₹471 |
| Profit Before Tax | ₹2,104 |
| Net Profit | ₹1,699 |
| EPS | ₹6.32 |
11. Peer Comparison
| Company | P/E | ROE % | Market Cap (Cr) | NPA (%) | CMP/BV |
|---|---|---|---|---|---|
| PFC | 6.2 | 21.0 | ₹1.42 L Cr | ~1.2 | 1.2 |
| REC | 6.6 | 21.5 | ₹1.05 L Cr | ~1.0 | 1.3 |
| HUDCO | 17.0 | 15.6 | ₹46,185 Cr | ~1.5 | 2.57 |
| IREDA | 28.8 | 18.0 | ₹44,948 Cr | 0.95 | 4.19 |
Valuation gap is massive. Market’s pricing in “green halo” and forgetting it’s still a PSU.
12. Miscellaneous – Shareholding, Promoters
| Category | June 2025 |
|---|---|
| Promoters | 71.76% |
| FII | 3.26% |
| DII | 3.12% |
| Public | 21.86% |
| Shareholders | 26.4 lakh |
- QIP diluted promoter holding
- Retail love: 26 lakh shareholders in less than a year
- No dividends yet. All profits go back to growth
13. EduInvesting Verdict™
IREDA is a textbook case of “PSU doing good things, but priced like a startup.” Backed by GoI, financing a massive green transition, with improving NPAs and strong loan growth.
Strengths
✅ 51% profit CAGR
✅ NPA under control
✅ Policy tailwinds (MNRE + 54EC Bonds)
✅ Massive loan book scaling
Risks
❌ Overvaluation vs peers
❌ High leverage
❌ Weak interest coverage
❌ PSU governance & pricing inefficiency
IREDA is not a green energy company—it’s the guy who funds green energy projects. The banker, not the builder. So don’t expect solar-like margins, but do expect bureaucratic stability… and some QIP dilution drama.
Metadata
– Written by EduInvesting Research | 12 July 2025
– Tags: IREDA, Renewable Finance, Green Bonds, Infra NBFC, MNRE, PSU, India Energy Transition
