IREDA:
IREDA full form is Indian Renewable Energy Development Agency. It works for the government of India. It helps projects that use clean energy by giving them loans and other financial support.
IREDA is planning to sell some parts of shares to the public as an IPO. An IPO is a one of the way for a company to increase money from investors who want to buy a part of the company. The money from the IPO will help IREDA lend more money to clean energy projects and make its business bigger.
Beginning on November 21, 2023, and ending on November 23, 2023, was the IPO. Every share costed between ₹30 and ₹32. Many people were interested in purchasing shares because the IPO was so successful. On November 29, 2023, the shares were launched on the stock exchange. The share price quickly increased and on December 12, 2023, it reached ₹102.2. This indicates that those who purchased shares during the IPO did so at a significant profit.
Let me tell you about IREDA:
[1] It is very hard to put money in these companies. They have very few shares that people can buy and sell (i.e most of the shares 75% — belong to the leader of India; he won’t sell them)
[2] Even big investors from other countries or India are not interested in these shares. So only less than 10% of the shares are available for trading. It is a small number.
[3] If many people want these shares, then the price can go up very fast. And, the opposite can also happen.
[4] This is what I believe about these shares:
a. Good point: climate finance/non-renewables is a business that can grow a lot. The government will pay attention to this area. So more money will be used here.
b. Bad point: the loans may be given to friends, who can waste money. This is more likely in the renewables area where there will be many tries to find the best product. Most of these will fail.
[5] The price of these shares is going up. And, these shares can also double or triple in value — but, the reason why I am not putting money in them now is that I don’t have a plan on when I should buy them, in case the price goes down.
[6] Also, if I have to guess how much money this business will make: I don’t think that it should grow more than 15% every year (in terms of the value created), so paying a high price for these shares does not fit my way of investing.
But, we have to respect what the market says. If the people are happy about this, then fine. But, for me I don’t know how to measure this happiness.”
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