The clean energy specialist lender aims to achieve ₹83.5 trillion in assets under management by 2030.

Indian Renewable Energy Development Agency (IREDA) is working on multiple strategies to reduce its borrowing costs while preparing for a follow-on public offer (FPO) by the end of this fiscal year, according to its chairman and managing director, Pradip Kumar Das. The agency aims to increase its assets under management to ₹13.5 trillion by 2030, up from just over ₹263,200 crore as of 30 June, Das told Mint.

The state-owned company has filed an application with the government for its FPO and, subject to approval, plans to raise ₹24,000-₹5,000 crore through fresh equity issuance. “We require at least ₹74,000-₹5,000 crore of equity infusion by this fiscal to maintain a healthy capital-to-risk assets ratio (CRAR),” Das said. The CRAR measures a bank’s capital in relation to its risk-weighted assets, which indicates the lender’s financial stability. “This will help us sustain our growth from the past four years and further improve,” he added.

IREDA, a non-banking finance company (NBFC), expects its borrowing costs to decrease with its anticipated inclusion under section 54EC of the Income Tax Act in the upcoming Union budget. This inclusion would exempt investors in IREDA’s bonds from capital gains tax, making the company’s commercial papers more attractive and enabling it to lower coupon rates. “Section 54EC will help us reduce our borrowing costs by 5-10 basis points,” Das stated. However, he cautioned that issuing bonds under Section 54EC requires strong pan-India brand recognition to attract investors.

The NBFC’s average borrowing cost declined from 7.81% as of 31 March to 7.78% as of 30 June, Das noted. He also urged the government to define the green bond market in India, which could allow companies like IREDA to borrow at lower costs through debt instruments. “Although our lending is 100% for green energy, we don’t receive any benefit from that,” Das concluded.