Could not disclose this in DRHP as RBI relaxation came recently, says IREDA CMD
NEW DELHI: The Indian Renewable Energy Development Agency (IREDA) is planning to seek a relaxation in sectoral exposure limits as merger and acquisition activities pick up pace in the country’s renewable energy sector.
“The Reserve Bank of India has recently allowed a niche Non-Banking Financial Company (NBFC) to ask for a relaxation in the sectoral exposure limits. We are going to seek approval from the IREDA board and then going to write to the Ministry of New and Renewable Energy for the same,” IREDA Chairman and Managing Director K S Popli told BusinessLine on the sidelines of an event to mark the global wind day organised by the Indian Wind Turbine Manufacturers Association (IWTMA).
IREDA is also in the process of being listed on the stock exchanges. Popli said that this information could not be mentioned within the Draft Red Herring Prospectus (DRHP) for the Initial Public Offering (IPO) as the RBI has recently allowed the relaxation. “We are going to propose MNRE to increase our sectoral exposure from 35 per cent to 60 per cent,” Popli added.
Once approved, IREDA will be allowed to have an exposure of up to 60 per cent of its net worth to any one group or company. “This has become necessary as we may be forced to shed a loan account if companies who we have lent to end up merging and coming under the same group company,” he explained.
IREDA’s current net worth is Rs 2,500 crore. Once the limit is relaxed, IREDA can lend or have the exposure up to ₹ 1,500 crore to any one group or company. As the country’s principal clean energy financing agency, IREDA holds 15 per cent of the renewable energy financing market.