IREDA hopeful of Gensol resolution, to raise ₹3,000 crore

Indian Renewable Energy Development Agency (IREDA), the lender to green businesses, said it was hopeful of recovering its exposure to scam hit Gensol Engineering and BlueSmart which have been dragged to the National Company Law Tribunal (NCLT). IREDA chairman and managing director Pradip Kumar Das on Monday said the entities had highly yielding assets and the problems was of mismanagement by promoters.

“We had an exposure of ₹640 crore before the company went down. Since then we have recovered ₹275 crore in the June quarter. Now we have ₹365 crore left for which we have already made provisions for,” he said at a briefing.

“We hope the NCLT finalises the resolution professional in a day or two and the operations resume normally. Then our money can be secured as its assets are standard,” he said. “The business model for which we had lent is absolutely lucrative. We lent for five years against the car’s life of 8-10 years. On some of the loans, we have received three-year repayments and on some, two-year repayments.”

Due to Gensol and one more defaulting borrower from Hyderababd, IREDA had seen its non-performing assets rise in the June quarter. Its gross NPAs doubled to 4.23% while net NPAs rose to 2.06% from 1.35%.

On lessons learnt from the Genson episode, Mr. Das said, “We have to tighten our review and monitoring system to avoid recurrence of Gensol-like episodes, particularly whenever a new entrant is growing faster in the new and emerging sector.” Meanwhile, the public sector NBFC, which recently raised ₹2,005 crore through QIP has announced plans to raise another ₹3,000 crore by this year-end. “We will try to optimise our equity and our borrowing so that we can optimise lending and overall minimise the borrowing cost,” Mr. Das said.

The Central Board of Direct Taxes recently notified IREDA bonds as ‘long-term specified assets’ under Section 54EC of the Income-tax Act. This would enable investors to claim capital gains tax exemption in case they invest in IREDA bonds. This would enable IREDA to further raise around ₹4,000-5,000 crore via bonds, Mr. Das added. He said the firm would see over 30% loan growth this fiscal.