Booking partial profits is always a good thing to do. Even I was holding since listing and booked around 100 levels, then re-entered few days before earnings.
I agree the major risks you mentioned about PSU, and that is something we definitely have to track.
Still not convinced about credit cycle though. Credit cycle is in early stages for most NBFC, plants are getting setup for Ethanol, Renewable energy etc, and the loans given are for long period. It would take some time for the bad governance to come out, projects by SME to fail (to which IREDA) has loaned money.
Even Gensol Engineering has got loan from IREDA recently, and that again is quite Risky IMO when we have companies like Tata Power in the same space.
I always appreciate someoneâs contra views! If not for contra views, there would be herd mentality in VP.
Yeah even Gensol, gave them 513 cr loan and the book value of Gensol is still 330 cr âŚ
Not trying to discourage any investment, but genuinely letting people know the business practices of this Company . Various ways to invest and make money .
In a way it speaks something about the companies who have been able to take loans on such terms from IREDA as well .
last 3 years hockey stick growth and sustaining the growth
networth 3 years back 2000 crs now 8500 crs +, loan book 23000 crores before 3 yrs and now 50000 crs+
exemption of divident from govt 3 years back so that we can plough our net profit for growth as it is very bullish time
have to have crar 15% but for AAA crar we need 17% right now crar is 23%
largely loan book in private sector (79%)
roof top solar , debt component just a matrix is for having 1 cr of rooftop solar we require to finance 1.25-1.5 lakh crore of outlay out which there will be some subsidy in relation to this from govt but it will get cleared depending on rural/urban regarding amount of it
each house hold 1.5 to 3 kw of req
rec is the nodal agency , as it is present pan india , will see what role IREDA will play in this as rec comes out of mechanism as we 3 are there to compliment each other (rec,ireda,pfc)
will try and leverage upto 6-7 times (atleast) to keep crar healthy
target before was 196000 cr of loan book by fy26 this was much before the ipo but now what we are seeing is massive growth and not focusing on specific target as oppurtunity is so masssive
ROA target 2.5%
operating leverage in banks - âeverything except npa have increased and now in respect of everything npa have decreased and with the same manpower of 178 people and want to further double business with the same man powerâ
The downgrade of the ratings of facilities of Indian Renewable Energy Development Agency Ltd
(IREDA or the âCompanyâ) is on account of continued non cooperation from the management of the
company, lack of lender feedback and as per the regulatory guidelines. BWR clarifies that the
downgrade is not based on the operational performance of the company, but on the regulatory
requirements of downgrading a rating in investment grade in the Issuer Not Cooperating category to the
non-investment grade after six months. As per the Q3FY24/9M FY24 results, the company continues to
perform well.
Itâs strange why the management have not co-operated with them. Minor setback.
For me it is a major concern as it indicates the mentality and demeanor of the Management which is anyway doubtful because PSU!
The sheer rise in the stock, circuit after circuit, doesnât usually end well for us retail investors. I am watching this space closely and might be tempted to book complete profits if something like this happens in the near future.
Ratings can be taken from any agency but only the important agencies ratings have any value. Brickworks ratings have no value so companies will shift to other agencies just like this company shifted to ICRA. They gave it the highest rating possible ie AAA so no need to worry about ratings at present. Ratings cost money, why waste it for a useless one.
I think more than the rating the issue is the quality of loans they are giving. They are in a very sticky zone and NPAs will be seen only after a few years. At present we are only counting the eggs and hope they get hatched.
I may be wrong but when i took a home loan, neither my salary was enough to cover the loan nor did i have any collateral other than what i bought from that loan i.e. the home. But as years went by, i was able to earn more and always paid the installments. Shouldnt that apply to companies as well.
Very True. If my valuation was high I would not have taken a loan instead would have made a down payment. The issue is not of giving loan to growing companies instead its giving loan to companies some listed above who have extremely poor track record.
No. In case of individuals we have more to loose if we default (we loose our homes if we cannot repay), hence the ultra low NPAs in home loans segment.
Companies, on the other hand, try to game the system. Promoters never loose anything, they take loan and build the assets, and the idea is to repay the loan from the cash generated by those assets/business. If that fails, oopsâŚlenders are left withâŚâcollateralâ.
Edit: this is not true for all the companies though. There are genuine promoters who will take loans, build businesses and repay as well. But we have seen enough cases of promoters taking lenders for a ride.
I donât usually sell when a stock is moving well, but for IREDA I have reduced position size to 5% yesterday as part of PF re-balancing. Also feel like itâs overbought and would consolidate for some time.
IREDAâs Navratna status should be on hold until the general elections.
Valuations for IRDEA are insane and currently stock is even more expensive than Bajaj Finance on price to book. They are in a lending businessâŚperiod. Whether they lend to renewable sector or a sweatshop, underlying fundamentals of a lending business donât change.
Given that Energy sector and especially renewable has hit a purple patch (refer to article below) with stocks trading at ridiculous valuations, IREDA is just lucky to catch the wave⌠Once the euphoria subsides, stock might correct heavily or see itself in a long term consolidation. Those who are sitting at 4-5x profit on IPO listing, might consider taking some profit off the table.
At some point, there is always an exception to the rule :).
But apart from pure luck there is no other skill or talent which will help us find the top of the stock. Thatâs why one should form their own principles for buying and selling and be at peace with them, regardless of what the stock does after entry or exit. That money in your bank will always find another good opportunity.
Well the only problem is I didnât put the money in bank, I re-invested in other stocks which might go to losses, while IREDA is up 12.5% since my exit. But my criterion is simple I canât invest more than 5% here.
IREDA hit LC today, I reduced position size even further to 2.5 % after seeing Hanging man yesterday and confirmation with red candle today.
However CMP(199) is still more than my initial exit price of 195. Letâs track and see what level Institutions are willing to support. Company has a long way to go even when the madness in Power stocks get over.
