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| Product | Quantum (Rs. Cr) (SEBI) | Quantum (Rs. Cr) (Other FSR) | Long Term Rating | Short Term Rating | Regulated By |
| Bank Loan Ratings | 0.00 | 25220.01 | ACUITE AAA | Stable | Reaffirmed | - | RBI |
| Total Outstanding | 0.00 | 25220.01 | - | - | - |
| Total Withdrawn | 0.00 | 0.00 | - | - | - |
| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE AAA’ (read as ACUITE triple A) on the Rs 25,220.01 Cr. bank facilities of INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED (IREDA). The outlook is 'Stable'.
Rationale for the rating The rating factors in Government of India’s (GoI) ownership (GoI holds 71.76% stake in IREDA as on June 30, 2026) and the strategic role of IREDA as the nodal agency for promoting, developing and financing renewable energy (RE) and energy-efficiency (EE) projects in India. The role assumes higher significance given India’s commitment on the sustainable development goals (SDGs) and the targets set on renewable energy capacities. The rating also derives strength from IREDA’s long track record in the RE sector, diversified resource profile, adequate capitalisation levels and a steady growth in the lending portfolio. The company has a well-diversified borrowing profile with access to funding via Bilateral FI’s, Bonds, Domestic Bank, Domestic FI, Multilateral FI and NCEF. The average cost of borrowings stood at 6.88% in FY26, which compares well with other public financial institutions. IREDA’s capitalisation profile improved in FY2026 with a gearing of 5.65 times as on March 31, 2026 compared to 6.31 times as on March 31, 2025 and 5.80 times as on March 31, 2024. This is supported by an equity infusion of Rs. 2005.90 Cr. through QIP in June ‘25. Post-QIP, Government of India’s shareholding reduced to 71.76% as on June 30, 2026 as against 75% as on March 31, 2025 and March 31, 2024. The AUM has grown from Rs. 59,698.11 Cr. as on March 31, 2024 to Rs. 76,281.65 Cr. as on March 31, 2025 and to Rs. 93068.71 Cr. as on March 31, 2026. The AUM has further grown to Rs. 94,936.00 Cr. as on June 30, 2026. These rating strengths are partly offset by the company’s moderate albeit improving profitability metrics as well as inherent asset quality challenges characterised by sector-specific and borrower concentration in the loan portfolio. The PAT has improved from Rs. 1,252.24 Cr. during FY2024 to Rs. 1,698.60 Cr. during FY2025 to Rs. 1873.34 Cr. during FY2026. However, the PAT for Q1FY27 is at Rs. 337.50 Cr. with high impairment costs to the tune of Rs. 418.54 Cr. The asset quality of the company in Q1FY2027 denoted by GNPA and NNPA is at 3.76 percent and 1.23 percent as on June 30, 2026. This is attributed to the on-going litigations with few companies. The company continues to face high borrower concentration risks as the top ten borrowers account for 28% of its loan portfolio as on June 30, 2026. Going forward, IREDA’s ability to control slippages on vulnerable assets and expand its loan book profitably would be key rating sensitivities. Any further dilution in GoI’s stake or a change in IREDA’s strategic role would also be a key rating sensitivity. |
| About the company |
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Indian Renewable Energy Development Agency Limited (IREDA) headquartered in Delhi was incorporated on March 11, 1987, under the administrative control of the Ministry of New and Renewable Energy (MNRE) to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects. It is GoI owned and has been notified as a public financial institution and registered as a non-banking financial company – asset finance company (NFBC-AFC) with the RBI. IREDA’s board of directors comprises two executive directors, one Government nominee from the MNRE, the GoI and four independent directors as on March 31, 2025. The company was also conferred Navratna status in April 2024 by GoI.
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| Unsupported Rating |
| Not applicable |
| Analytical Approach |
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Acuité has considered the standalone credit profile of IREDA and has duly factored in the benefit derived from the ownership by Government of India (GoI) to arrive at the rating.
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| Key Rating Drivers |
| Strength |
| Sovereign ownership and strategic importance to GoI
IREDA is a 71.76% GoI-owned entity and is of strategic importance to the GoI for the promotion and development of the RE sector in India as on June 30, 2026. Thus, the ratings factor in the Sovereign ownership and strategic importance of the company. GOI infused equity of Rs. 1,500 Cr. in March 2022. IREDA is a strategically important entity and was set up by GoI under the administrative control of Ministry of New and Renewable Energy (MNRE) to promote, develop and extend financial assistance for RE and EE projects. IREDA has been instrumental in implementing several schemes of the MNRE. IREDA receives benefits of being a government-owned entity in the form of GoI guarantees for its overseas bond issuances and borrowing from multilateral agencies. Acuité believes that IREDA will continue to benefit from its established presence in the RE sector and the strategic role it plays as the nodal agency for promoting, developing and financing renewable energy (RE) and energy-efficiency (EE) projects in India. Diversified borrowing profile and comfortable liquidity profile IREDA being a government owned entity has been able to raise funds at competitive costs, both in international and domestic markets. The average cost of borrowings stood at 6.88% during FY26, which compares well with other public financial institutions. It has a well-diversified borrowing profile with access to funding via Bilateral FI’s, Bonds, Domestic Bank, Domestic FI, Multilateral FI and NCEF. The foreign currency debt is from multilateral agencies and has a fairly long tenure (tenor of 10-40 years), which augurs well for IREDA’s liquidity profile. Acuité believes, going forward, the ability of the company to mobilise additional lower cost funding through debt/ sub debt and its ability to deploy the funds profitably will be a key rating monitorable. Growth in loan portfolio and disbursements IREDA’s loan portfolio increased to Rs. 93068.71 Cr. as on March 31, 2026, from Rs. 76,281.65 Cr. as on March 31, 2025, from Rs 59,698.11 cr. as on March 31, 2024. Further, the AUM has grown to Rs. 94,936.00 Cr. as on June 30, 2026. Improvement in loan portfolio is driven by higher disbursements. The company reported disbursements of Rs 34946.00 Cr. during FY2025-26 from Rs 30,167.87 Cr. during FY 2024-25 (Rs. 25,089.04 Cr. during FY 2023-24). The total loan outstanding during Q1FY27 consists of segments like loan facility to state utilities - discom (16.17%), solar thermal / spv (25.79%), ethanol (7.65%), Hydro Power (8.47%) and others (41.92%). The disbursements during Q1FY2027 stands at Rs. 6,556.00 Cr. Acuité believes that going forward the ability of the company to maintain the growth momentum in AUM will be key rating sensitivity. Adequate Capitalization levels The company’s networth has improved to Rs 13781.35 Cr. as on March 31, 2026 from Rs 10,266.16 Cr. as on March 31, 2025 from Rs 8,559.43 Cr. as on March 31, 2024. The networth as of June 30, 2026 stood at Rs. 14133.00 Cr. from June 30, 2025 which stood at Rs. 12,401.86 Cr. owning to an equity infusion of Rs. 2,005.90 Cr. through QIP in June ’25. IREDA’s capitalisation profile improved in FY2026 with a gearing of 5.65 times as compared to 6.31 times as on March 31, 2025 and 5.80 times as on March 31, 2024. The overall Capital adequacy ratio (CAR) and Tier-I CAR for IREDA stood at 20.59 percent and 18.41 percent as on March 31, 2026 from 17.77 percent and 15.15 percent as on March 31, 2025 respectively and this improvement in overall CAR is post equity infusion. Acuité believes the ability of the company to maintain adequate levels of capitalisation remains a key rating monitorable. |
| Weakness |
| Moderate Asset quality
The asset quality of the company remains moderate on YoY basis with absolute gross non-performing asset (GNPA) and net non-performing asset (NNPA) levels of Rs 3,245.46 Cr. and Rs 1,172.31 Cr, respectively, as on March 31, 2026. The GNPA percentage moderately increased to 3.49 percent as on March 31, 2026 from 2.45 percent as on March 31, 2025. However, the asset quality of the company deteriorated in Q1FY2027 as denoted by a GNPA and NNPA at 3.76 percent and 1.23 percent as on June 30, 2026. This is attributed to the on-going litigations with few companies. The softer dpd buckets will remain monitorable as fresh slippages reflected for the year. The NPAs in the loan book is majorly in Solar sector, Discom and the small hydro projects and Wind Sector. Sector and borrower concentration The company’s loan book continues to have sector and borrower-wise concentration. The total loan outstanding portfolio during Q1FY27 consists of segments like loan facility to state utilities - discom (16.17%), solar thermal / spv (25.79%), ethanol (7.65%), Hydro Power (8.47%) and others (41.92%).Top 10 exposure is ~Rs 26,596.35 Cr. as on June 30, 2026, and have ~28 percentage of total portfolio. The company continues to have sector and borrower-wise concentration owing to its policy mandate of being the nodal agency for RE development in India. Acuité believes sector and borrower concentration will continue to weigh on the company’s credit profile over the near to medium term. Moderate profitability, albeit improving The company has reported a PAT of Rs 1873.34 Cr. during FY2026 and Rs 1,698.60 Cr. during FY 2025 and Rs 1,252.24 Cr. during FY 2024. However, the PAT for Q1FY27 is at Rs. 337.50 Cr. with high impairment costs to the tune of Rs. 418.54 Cr. The ROAA have been at 2.21 percent as on March 31, 2026 from 2.45 percent as on March 31, 2025 from 2.23 percent as on March 31, 2024. |
| ESG Factors Relevant for Rating |
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IREDA belongs to the NBFC sector which complements bank lending in India. Some of the material governance issues for the financial services sector are policies and practices with regard to business ethics, board diversity and independence, compensation structure for board and KMPs, role of the audit committee and shareholders’ rights. On the social aspect, some of the critical issues for the sector are the contributions to financial inclusion and social development, responsible financing including environmentally friendly projects and policies around data privacy. The industry, by nature has a low exposure to environmental risks. IREDA was incorporated to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects. IREDA’s board of directors comprises two executive directors, two Government nominees from the MNRE, the GoI and four independent directors. The company was also conferred Navratna status in April 2024 by GoI.
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Rating Sensitivity
| Potential triggers (individual or collective) for an upward rating action: |
| Not Applicable |
| Potential triggers (individual or collective) for a downward rating action: |
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| Liquidity Position |
| Adequate |
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Acuite believes that IREDA will maintain adequate liquidity profile as it has sufficient long-term banking credit lines and unutilized credit lines and has cash and cash equivalents & bank balances of Rs 717.15 Cr. as on March 31, 2026. As per the ALM statement dated March 31, 2026, IREDA’s repayment obligations during FY2026-27 are expected to be Rs. 16,087.34 Cr., against receivables of around Rs. 16,575.26 Cr. over the same period, resulting in an expected cumulative positive mismatch of Rs. 487.92 Cr over this period. Acuite considers the financial flexibility available due to GoI ownership and undrawn sanctioned bank lines.
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| Outlook : Stable |
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| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
**Total Assets is as per Acuite's calculation |
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| Status of non-cooperation with previous CRA (if applicable): |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Banks And Financial Institutions: https://www.acuite.in/view-rating-criteria-45.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.htm |
| Note on complexity levels of the rated instrument |
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| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Contacts |
List of instruments and names of regulators of the instruments |
