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IREDA Share Price Drops, But Upward Momentum Bubbles Under

IREDA share price declined on Tuesday with the momentum surrounding its bond issuance fizzling out. NSE-listed IREDA traded at Rs 185.59 at the time of writing, having declined by 22 percent in the intraday session. State-owned India Renewable Energy Development Agency issued a Rs 1,500 bond, which included a green shoe option of Rs 1,000.

With an interest rate of 7.44 percent per annum, the bond was oversubscribed 2.65 times, signaling investor confidence in the corporation’s growth outlook. The bond will mature in 10 years, or 2 months, according to an exchange filing. The stock listed at Rs 50 in IN November 2023, meaning that the share price is currently 270 percent above the initial listing price.

However, the decline in the IREDA share price a day after exchange filling of the bond issuance is a cause for concern, as some investors are hoping that it could provide fuel to propel the shares to retest the all-time highs of RS 214.80 recorded in February. That said, the bullishness in the IREDA share price still bubbles under, underlined by inclusion in the FTSE ALL World Index on June 21.

The Indian government has embarked on a policy of transitioning the country towards dependency on renewable energy for 50 percent of its energy needs by 2030. That has seen favourable investment climate created to ensure that the world’s fifth-largest economy generates 500 MW of renewable energy by that time. IREDA finances renewable energy projects, placing it at the forefront of the transition.

Technical analysis

The momentum on IREDA share price is currently bearish-leaning, and the downside is likely to continue if resistance is established at the RS 187.01 mark. That could see the first support established at 183.26, but continued control by the sellers at that point could lead to further decline to test 180.00. Conversely, a move above 187.00 will signal control by the buyers, who will likely encounter the first resistance at 190.60. A break above that level will strengthen the upward momentum, and could see further gains to test 193.30.