ICRA upgrades IREDA’s ratings from ‘AA+’ (Outlook: Positive) to ‘AAA’ (Outlook: Stable)

The credit rating agency ICRA Limited has upgraded IREDA’s ratings from ‘AA+’ (Outlook: Positive) to ‘AAA’ (Outlook: Stable)
ICRA upgrades IREDA’s ratings from ‘AA+’ (Outlook: Positive) to ‘AAA’ (Outlook: Stable)
ICRA upgrades IREDA’s ratings from ‘AA+’ (Outlook: Positive) to ‘AAA’ (Outlook: Stable)

New Delhi: In a major development for IREDA (Indian Renewable Energy Development Agency Limited), the credit rating agency ICRA Limited has upgraded IREDA’s ratings from ‘AA+’ (Outlook: Positive) to ‘AAA’ (Outlook: Stable).’ According to an official statement of the company, the ICRA Limited has upgraded the long-term bonds programme rating of the IREDA to ‘AAA’ (Outlook: Stable) from ‘AA+’ (Outlook: Positive). The rating was upgraded for IREDA’s Rs 14,900 crore long-term bonds programme for FY 2022-23, Rs 2,806 crore long-term bond programme up to FY 2021-22 and Rs 1,000 crore subordinated debt programme.

Further, ICRA Limited has also upgraded the rating of IREDA’s Rs 1,500 crore perpetual debt programme to ‘AA+’ (Outlook: Stable) from ‘AA’ (Outlook: Positive). ICRA has reaffirmed the ratings of IREDA’s Rs 4,000 crore GOI-fully serviced bonds at ‘AAA’ (Outlook: Stable).

The revision in the ratings factor in the improvement IREDA’s credit profile with increased business volumes, improvement in the asset quality indicators supported by lower slippages and recoveries from stressed accounts over the past two years, and the consequent improvement in the earnings profile on a sustained basis. The asset under management has grown by a CAGR of ~16 percent over the past 4 years to Rs 37,888 crore as on December 31, 2022.

The company’s reported asset quality continued its improvement trajectory with gross and net NPA of 4.2 percent and 2.0 percent, respectively, as on December 31, 2022 from 5.2 percent and 3.1 percent respectively, on March 31, 2022 (8.8 percent and 5.6 percent, respectively, as on March 31, 2021), supported by limited slippages, recoveries from some loan accounts and the growth in the loan book. Consequently, decline in the credit cost due to limited slippages and reduction in operating expenses resulted in improvement in its RoA to 2.1 percent in H1 FY2023 from 1.8 percent in FY'2022.

Commenting on this IREDA's Chairman & Managing Director (CMD) Pradip Kumar Das said, "We are happy with the rating upgrade from ICRA, which recognises IREDA's strong credit profile as well as its extraordinary growth along with best quality corporate governance in last three years. This would not have been possible without the continuous support and guidance from Union Minister for Power and New and Renewable Energy RK Singh and Minister of State for New & Renewable Energy Bhagwanth Khuba, MNRE Secretary Bhupinder Singh Bhalla, officials of MNRE and the board of directors. The higher rating will enable us to access capital at lower cost, allowing us to expand our portfolio of RE project financing and support India's energy transition towards a cleaner and sustainable future."

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

PSU Watch