IREDA share price jumps 17%, surges 26% in five sessions; what’s driving the rally?

Indian Renewable Energy Development Agency (IREDA) share price rallied over 17 per cent on Thursday, hitting fresh-record high ahead of its June quarter earnings announcement. The stock went intraday high to ₹288 on July 11.

This surge has led the market capitalisation of the multibagger stock rise to ₹75,000 crore.

IREDA stock has gained nearly 25.12 per cent in the last five trading session on the National Stock Exchange (NSE).

On Thursday, the company released its shareholding pattern for the June quarter, revealing that foreign portfolio investors have doubled their stake in the renewable energy PSU.

As of June 30, foreign portfolio investors held a 2.7 per cent stake in IREDA, up from 1.36 per cent in the March quarter. However, no significant shareholders with a stake exceeding 1 per cent have emerged.

The number of small shareholders also increased during the April-June period. The total number of shareholders with an authorized share capital of less than ₹2 lakh rose to 22.15 lakh, up from 21.23 lakh in the March quarter.

On the other hand, India's domestic mutual funds have reduced their stake in the company, opting to book profits as the stock reached new highs. Mutual funds now hold a 0.24% stake, down from 0.53% at the end of March.

On June 21, the company announced that it raised ₹1500 crore through issuance of bonds. The bond issuance, which consisted of base issue of ₹500 crore and Green shoe option of ₹1,000 crore, received an overwhelming response from investors and was oversubscribed 2.65 times. The funds was raised at an annual interest rate of 7.44% for a tenure of 10 years and 2 months.

“We are happy with the overwhelming response to our bond issuance. The oversubscription by 2.65 times underscores the trust and confidence that investors have in IREDA’s vision and its crucial role in driving the renewable energy growth in the country. This successful capital raising will enable us to further strengthen our efforts in financing green energy projects, contributing to India’s goal of achieving 500 GW non-fossil fuel installed capacity target by 2030," said Pradip Kumar Das, Chairman & Managing Director

IREDA's shares debuted on the stock market in November last year at ₹32 per share. Since then, the stock has increased more than 8 times its IPO price, approaching nearly ₹300.

On the charts, the stock is trading in "overbought" territory with a Relative Strength Index (RSI) of 83. An RSI reading above 70 indicates that the stock is considered "overbought."