Finance Ministry Invites Bids from Merchant Bankers for IREDA IPO

The Ministry of Finance’s Department of Investment and Public Asset Management has invited bids from book-running lead managers (BRLMs) to help list the government’s equity in the Indian Renewable Energy Development Agency (IREDA).

The government will choose up to three merchant bankers with experience in public offerings to form the BRLMs.

The last day to submit the bids is April 28, 2023. Bids will be opened on May 1, 2023.

IREDA received the Cabinet nod for listing on stock exchanges after an IPO via a part sale of the government’s stake in the company. The approval was granted due to the recent change in capital structure in IREDA following the infusion of ₹15 billion (~$181.75 million) by the government early last year.

The government plans to reduce its stake in IREDA by up to 25%. The percentage of the equity to be divested through the IPO will be determined based on IREDA’s post-issue capital. A portion of the IPO may be reserved for IREDA employees.

The BRLMs are responsible for all aspects of the IPO, including advising the government on timing and structure, ensuring compliance with regulations, conducting due diligence, preparing the prospectus, filing with regulatory authorities, conducting market research, pricing the issue, conducting roadshows, underwriting the IPO, coordinating with intermediaries, organizing roadshows, printing, and distributing stationery, paying statutory fees, and completing post-issue activities.

Bidders must have advised, handled, and completed at least one IPO of at least ₹15 billion (~$183.73 million) or managed at least one equity capital market transaction of at least ₹45 billion (~$551.2 million) in the last five years.

Bidders must demonstrate an understanding of IREDA and experience in the areas of non-banking financial companies and financing of renewable energy and energy efficiency projects.

IREDA posted a profit of ₹2.54 billion (~$31 million) for the fourth quarter (Q4) of the financial year (FY) 2022-23, a jump of 12% year-over-year (YoY).

The agency was recently granted an ‘Infrastructure Finance Company’ status by the Reserve Bank of India, enabling better exposure to renewable energy sector financing and achieving competitive fundraising rates by providing access to a broader investor base.

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