💰 Financial Performance

Revenue Growth by Segment

Total income grew 35.8% YoY to INR 6,754.78 Cr in FY25 from INR 4,965.29 Cr in FY24. Interest income, the primary driver, increased 36.3% to INR 6,575.39 Cr. Fees and commission income grew 59.5% to INR 95.71 Cr, while other operating income stood at INR 58.18 Cr.

Geographic Revenue Split

The loan book is diversified across India with significant exposure in Telangana (INR 8,207 Cr or 9.7% of H1 FY26 AUM), followed by Andhra Pradesh, Tamil Nadu, Odisha (INR 1,796 Cr), Sikkim (INR 1,834 Cr), and Uttar Pradesh (INR 1,409 Cr).

Profitability Margins

Net Interest Margin (NIM) remained stable between 3.0% and 3.3% over the last four years. Profit After Tax (PAT) margin for FY25 was 25.1% (INR 1,698.60 Cr PAT on INR 6,754.78 Cr income). Return on Assets (RoA) improved to 2.3% in 9M FY25 from 2.2% in FY24, while Return on Equity (RoE) held steady at 17.3%.

EBITDA Margin

Core operating profitability (Profit Before Tax) grew 24.8% YoY to INR 2,103.80 Cr in FY25. However, Q1 FY26 PAT moderated to INR 246.67 Cr due to high impairment costs of INR 362.61 Cr, representing a significant quarterly deviation.

Capital Expenditure

As a financial institution, capital is deployed via equity infusions: INR 1,500 Cr was infused by GoI in March 2022, and INR 2,005.90 Cr was raised through a Qualified Institutional Placement (QIP) in June 2025 to support loan book expansion.

Credit Rating & Borrowing

Maintains a credit rating of [ICRA]AAA (Stable). The average cost of funds was 7.61% in FY25. Borrowings are well-diversified: Bonds (37%), Bank/FI loans (44%), and Foreign Currency loans (19%).

⚙️ Operational Drivers

Raw Materials

Capital is the primary 'raw material' for lending operations, with the cost of funds at 7.61% in FY25. Finance costs reached INR 4,141.03 Cr in FY25, up 30.9% YoY.

Import Sources

Foreign currency funding is sourced from international multilateral agencies located in Japan (JICA), Germany (KfW), and other global regions via the World Bank, ADB, EIB, and NIB.

Key Suppliers

Key capital providers include Japan International Cooperation Agency (JICA), Kreditanstalt fur Weideraufbau (KfW), Asian Development Bank (ADB), World Bank, and European Investment Bank (EIB).

Capacity Expansion

Gross Loan Portfolio (GLP) grew 27.8% YoY to INR 76,282 Cr in FY25 and further expanded to INR 84,477 Cr by H1 FY26, representing a 41.5% increase over 18 months.

Raw Material Costs

Finance costs as a percentage of total income stood at 61.3% in FY25. Procurement strategy focuses on long-term multilateral debt (up to 40-year tenures) to match the long-term nature of renewable energy assets.

Manufacturing Efficiency

Capital-to-Risk Weighted Assets Ratio (CRAR) stood at 19.52% as of June 30, 2025, well above regulatory requirements, following the INR 2,005.90 Cr QIP.

Logistics & Distribution

Not applicable for financial services.

📈 Strategic Growth

Expected Growth Rate

31%

Growth Strategy

Achieving growth through expansion into emerging segments like Green Hydrogen, Battery Energy Storage Systems (BESS), and Pumped Storage Hydro. The company is leveraging its 'Navratna' status (granted April 2024) to take higher exposures and utilizing the INR 2,005.90 Cr QIP proceeds to support a 31% YoY growth in the loan book.

Products & Services

Financial assistance, term loans, and project financing for Solar (26% of book), Wind (16%), Small Hydro (12%), Ethanol (10% of FY25 disbursements), and Energy Efficiency projects.

Brand Portfolio

IREDA (Indian Renewable Energy Development Agency Limited).

New Products/Services

New focus on Green Hydrogen, Electrolyzers, and RE equipment manufacturing (Solar Modules/Cells/Wafers) to capture the evolving energy transition market.

Market Expansion

Targeting the pan-India renewable energy installation target of 500 GW by 2030, with a focus on state utility loan facilities which comprised 31% of FY25 disbursements.

Market Share & Ranking

Leading specialized RE financier in India; GLP growth of 31% in H1 FY26 significantly outpaced peers REC (13%) and PFC (13%).

Strategic Alliances

Nodal agency for Ministry of New and Renewable Energy (MNRE) for routing government subsidies and grants.

🌍 External Factors

Industry Trends

The industry is shifting toward integrated RE solutions (BESS/Pumped Hydro). IREDA is positioned as the nodal agency for India's 2030 RE targets, benefiting from a 31% growth trend in the sector.

Competitive Landscape

Competes with larger power sector financiers like PFC and REC, but maintains faster growth (31% vs 13% for peers) due to specialized RE focus.

Competitive Moat

Durable advantage through Sovereign Ownership (71.76% GoI stake) and Navratna status, providing lower borrowing costs and higher credit limits. This moat is sustainable as long as GoI maintains a majority stake and strategic focus on RE.

Macro Economic Sensitivity

Highly sensitive to interest rate cycles; a 1% increase in borrowing costs could impact finance costs by approximately INR 400-500 Cr based on the current debt profile.

Consumer Behavior

Shift in state discom behavior toward increasing RE procurement to meet Renewable Purchase Obligations (RPO).

Geopolitical Risks

Indirect exposure to global supply chain disruptions for RE components (solar cells/modules) which could delay project execution and loan disbursements.

⚖️ Regulatory & Governance

Industry Regulations

Regulated as an NBFC-Infrastructure Finance Company (IFC) by the RBI; must comply with Stage 3 asset provisioning (currently 58.8% PCR as of FY25).

Environmental Compliance

Indirectly exposed to environmental risks through its portfolio; mitigated by adequate diversification across solar, wind, and hydro segments.

Taxation Policy Impact

Effective tax rate includes current tax of INR 471.31 Cr and deferred tax credit of INR 66.11 Cr for FY25.

Legal Contingencies

Ongoing litigations with Gensol Engineering and Andhra Pradesh Central Power Distribution Corporation Limited (APCPDCL) are critical, as they contributed to the GNPA spike to 4.13% and NNPA to 2.06% in Q1 FY26.

⚠️ Risk Analysis

Key Uncertainties

Asset quality vulnerability due to wholesale loan concentration; lumpy slippages could impact profitability by 20-30% in a single quarter.

Geographic Concentration Risk

Significant exposure to Andhra Pradesh discoms (INR 874 Cr in assets) where judicial dispensation was previously required for non-classification as Stage 3.

Third Party Dependencies

High dependency on GoI for strategic role and credit rating support; any dilution in GoI stake below 51% would be a key rating sensitivity.

Technology Obsolescence Risk

Risk of technology shifts in RE (e.g., new battery chemistries) affecting the viability of long-term (20-40 year) project loans.

Credit & Counterparty Risk

Stage 2 assets stood at 2.6% as of December 2024; Stage 3 assets increased to 2.7% in Dec 2024 and further to 3.97% by H1 FY26.