Cabinet approves listing of IREDA on Stock Exchanges

Tags: Economy/Finance National News

The Union Government on 18 March approved the listing of the Indian Renewable Energy Development Agency (IREDA) on the stock exchanges.

An overview of the news

• The Cabinet Committee on Economic Affairs (CCEA) decided to approve an Initial Public Offer (IPO) by way of partial sale of the government's stake in CPSEs to raise funds by issuing fresh equity shares.

• The Department of Investment and Public Asset Management (DIPAM) will carry out the listing process.

• Earlier in the year 2017 also IREDA was given approval to bring IPO.

• According to the government, in March 2022, it was decided to invest Rs 1500 crore in IREDA.

• This has changed the capital structure of the company, due to which it has become necessary to bring an IPO.

Significance of the move

• The approval will help the IPO unlock the value of the government's investment and provide an opportunity to the public to own a stake in national assets and earn from it.

• This will help IREDA to raise a part of its capital requirement for carrying out development plans without depending on the exchequer.

• The move will improve governance through greater market discipline and transparency arising out of listing requirements and disclosures.

Indian Renewable Energy Development Agency (IREDA) 

• It was incorporated as a Public Limited Company in the year 1987 as a 'Non-Banking Financial Institution'.

• It is a Miniratna (Category 1) type company functioning under the administrative control of 'Ministry of New and Renewable Energy, Government of India.

• Its function is to encourage projects related to new and renewable energy sources and to provide them financial assistance for their development.

• It has been notified as a 'Public Financial Institution' under section 4'A' of the 'Companies Act, 1956'.

• Chairman and Managing Director - Pradip Kumar Das