Ireda eyes FPO by FY25-end, lower borrowing cost, CMD Das says
₹3.5 trillion of assets under management by 2030, from just over ₹63,200 crore as of 30 June, Das told Mint. The state-owned company has already filed an application with the government for its FPO, and subject to approval, it will be looking to raise ₹4,000-5,000 crore via an issue of fresh equity, he said. “We require at least ₹4,000-5,000 crore of equity infusion by this fiscal in order to ensure that a healthy CRAR is maintained," Das said. CRAR is capital-to-risk assets ratio, which is a measure of a bank’s capital to its risk-weighted assets.
It helps assess a lender’s financial stability. “It will help us sustain the kind of growth we have seen in the last four years and further improve on that," he said. The non-banking finance company (NBFC) is expecting its cost of borrowing to decline following its expected inclusion under section 54EC of the Income Tax Act in the upcoming Union budget.
Following this inclusion, investors in Ireda’s bonds will be exempt from capital gains tax, making the company’s commercial papers more lucrative and helping it lower its coupon rates. “Section 54EC will definitely help us bring down our cost of borrowing by 5-10 basis points," he said. However, he warned that raising bonds under Section 54EC won’t be simple as it requires having a pan-India brand recognition to encourage investors to buy into the company’s instruments.
The NBFC’s average cost of borrowing moderated from 7.81% as of 31 March to 7.78% as of 30 June, Das said. He also urged the government to define the taxonomy for a green bond market in India, that could help companies like Ireda borrow at lower costs through debt instruments. “Because although our lending is 100% for green energy, we don’t get any benefit from
. Read more on livemint.com
