IREDA shares aim to extend Tuesday's 10% surge after RBI announcements

Shares of Indian Renewable Energy Development Agency (IREDA) Ltd. will be in focus on Tuesday, March 25, after the stock had surged 10% during Monday's trading session.

The Reserve Bank of India, on Monday, announced changes to their Priority Sector Lending (PSL) guidelines, which also involved the renewable energy sector.

As per the revised circular, the RBI wants to broaden the purposes based on which loans may be classified under "renewable energy."

Additionally, bank loans up to ₹35 crore to borrowers for renewable energy-based power generators and for renewable energy-based public utilities will also be available for Priority Sector Lending.

For individual households, the borrowing limit for renewable energy will be ₹10 lakh per borrower.

In October last year, IREDA had announced its plans to establish a wholly-owned retail subsidiary for handling the retail business under the PM-Suryaghar (Rooftop solar), PM-KUSUM, B2C segments in renewable energy as well as emerging sectors within the renewable energy basket including Electric Vehicles, Energy storage, Green Technologies, Sustainability, Energy Efficiency among others.

The proposal has already received approval from the Department of Investment and Public Asset Management (DIPAM).

During the December quarter, the loans sanctioned by IREDA had more than doubled from last year, while its loan book outstanding grew by 36% from last year to ₹69,000 crore.

During Monday's surge, IREDA saw as many as 7.3 crore shares change hands, which is the combined volumes of the last five sessions put together. However, only 13% of the number of shares traded were marked for delivery.

Shares of IREDA ended 10.1% higher on Monday at ₹170.5. The stock is still down 45% from its all-time high level of ₹310.