As largest pure play green financier, what is the long-term road ahead for IREDA? Pradip Kumar Das answers

Pradip Kumar Das, Chairman and Managing Director of IREDA, highlighted the significant growth the organization has witnessed in the renewable energy sector over the past three years. He emphasized that while solar energy has been a major focus, with a substantial increase of 28 times, the loan portfolio in this sector has slightly decreased to 30% in the latest audited figures. Das also pointed out that IREDA is actively involved in new and emerging areas such as rooftop solar, excluding residential projects, along with exploring opportunities in alternative sources like CBG and ethanol. Considering India's agricultural economy, there is a promising scope for growth in these sectors. Looking ahead, IREDA is set to delve into areas like pump storage, green hydrogen, offshore wind, aiming to expand its portfolio in sustainable energy solutions.

Every time I look at IREDA stock and everyone is like, oh my God, is it real? It went public at less than Rs 40 and then it went to as high as 170, actually Rs 200. So, are you pinching yourself?
Pradip Kumar Das: First of all, we are a responsible Government of India organisation which is spearheading the renewable energy development in the country through financing which is the most crucial aspect, not only renewable, new and emerging sector. So, when we come out with the IPO, the market was quite uncertain about us, as also other stakeholders. Finally, whatever the pricing was decided at the apex committee level, we started at Rs 32. But the issue opened 50 plus and it went up continuously to Rs 215, 219 after which it came down and it was stable for some time at 170, 180.

Again this is in the midcap and smallcap segment. A lot of things were happening and moreover, as a responsible entity, our job is to stick to our fundamentals and exhibit good governance and we are continuously doing that. If you see the September result on the basis of which we did the IPO, our December result has already shown quite a lot of improvement, which during the road show we had shared with that kind of feeling with the prospective investors. Since I was told that there is not much seller available, anyway that is the market and the stakeholder to decide. As a responsible entity, we will continue to give our performance and best quality corporate governance standard which we are doing.


Praveer Sinha: Recently, the Prime Minister programme of one crore households which will be given solar power, is IREDA going to finance that and will that be at a very subsidised rate of interest? If this has to become attractive and implemented, financing costs will be very critical for the balance amount over and above the subsidy that the government is giving.
Pradip Kumar Das: Time and again, I have been asked this question. Whenever anything on financing of renewable is concerned, everybody looks at IREDA. Out of the total 500 gigawatt planned, rooftop was planned for 40 gigawatt. We have already achieved 10. So, the remaining 30 gigawatt has to be achieved. The one crore residential rooftop solarisations may add around 30-35 gigawatt to.

As far as financing is concerned, perhaps our ministries engaged REC as the nodal agency with whom we are coordinating because of their pan-India network presence, as well as closely coordinating with the distribution companies. I was told that they have worked with the banks and DFS. Banks were asked to have a very thin margin of 50 bps and to lend below 7%. So, certainly, for a company like IREDA, that will not be doable. The reason is, we borrow from the market and then we lend. We do not have any kind of subsidy or anything with respect to any kind of lending in this space.

As a matter of fact, this subsidy part, around up to one kilowatt, some 30,000, 2 kilowatt, 60,000 and 3 kilowatt and above 78,000, that kind of subsidy will be given. So, that subsidy will be a capital subsidy and then lending is to be done for the remaining part. Lending at 7% for IREDA will not be feasible at all because we raised from the bond market recently at around 7.5%, a little over that. So, that is not as of now achievable.

But as far as supporting that space with REC or any bank or any other agency is concerned, because of our expertise, we are there to partner with them.

As the largest pure play green financier, what is the long-term road ahead for the company and like Dr Sinha was also talking about, big-bang announcements post election expected on the distribution front, what is it that you are anticipating?
Pradip Kumar Das: If you look at our loan book which we have more than doubled in the last three years and there was a time where our loan portfolio used to be more than 35% to 40% in solar, all talking about growth of solar and all like 28 times we have grown in solar. But if you see our book of December audited figures, it has come down to 30%. If you see the new and emerging space, we are having around 37% of our share.

Now is IREDA going to fund this rooftop solar or not? We are doing rooftop solar, but certainly not residential rooftop solar. I will make two classifications here. One, there is a hardcore retail when we talk about residential and IREDA is a pure play green finance company, but at project financing level, we hardly have 175 employees. We are also the largest green finance company. And not only that, when you talk about retail, we have N number of banks with us. We have government banks with us.

So, what is required in this rooftop solarisation is that they are networked and easy to access individual households. So, what the schedule banks can do, even though MNRE has engaged as nodal agency, they have not engaged them just to finance, they have to handle the entire implementation. So, financing is open to all, like all banks and others, so that is what I was trying to make it clear, that banks were asked to support with a very thin margin so that around 7 they can do it to make it easily bankable.

Already more than one crore registrations have been done. I saw the report on MNRE's site. Now coming back to new and emerging, because when we talk about solar, every sector has its limitations. First of all, when we talk about solar, we require a huge amount of land for that and we all know in economics, land is the most scared asset. We should be very careful while using the land.

When we talk about using the land for solar or wind projects. We have 25 years. So, land should be barren and it will be guaranteed to be barren for the next 25 years. Then only we have to select that kind of land. We need to look into the kind of growth that we are having, like I always say, for every single GDP percentage growth, we require at least 1.25 to 1.5 times of GDP growth in energy growth.

Therefore, a huge amount of energy growth requirement will be there. And in the time to come, when we are determined to become a developed economy in 2047, a huge amount of energy requirement will be there. So, we need to look into new sources and emerging sources, like this CBG and ethanol, though their size may not be big, but we being agriculture based economy, we have a fair amount of opportunity there and we have grown, our loan book has also grown quite big in last one-and-a-half year and in the time to come, this pump storage, green hydrogen and its derivatives, as well as offshore wind, these are the immediate area we are going to look into.