If you have recently been observing the stock market fluctuations then, you might have come across the rather astonishing price rise in the IREDA shares. Well, what is driving this rally then? Is it a one-time flash in the pan or is it the trend taking its roots deep into the future? Now, let’s consider why the rate of such movements has increased and attempt to identify what makes investors so eager to push the ‘buy’ button.
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1. Government Push for Renewable Energy
India is very bullish on renewable power and IREDA — the Indian Renewable Energy Development Agency — is at the heart of this move. The political authorities have intentions to increase the shares of renewable energy and are offering support in form of grants to organisations interested in such projects. IREDA is one of the major players in financing renewable energy projects which is an emerging trend we see today.
Some of the future plans include the National Green Hydrogen Mission and plans for increasing capacities of solar and wind; thus making the sentiments of investors bullish on IREDA. This wave of optimism has been enriching the IREDA share price since the firm is poised to wholly fund the country’s green energy endeavours.
2. Strong Financial Performance and Growth Prospects
As fundamental as it is, financial performance is certainly the ‘bread and butter of any stock’ rally. IREDA has also over the last quarter been presenting better figures such as rising revenues, declining NPAs and healthy loan disbursements. This has helped in boosting the share price in a similar way that vitamins boost the immune system.
This is especially true on the side of growth because investors have equally expressed their delight in this area. The original capital of IREDA has been increasing the loan portfolio at the same time it has been having a sound financial status. It has also been keen on financing new renewable power undertakings, be it big utility-scale photovoltaic solar power plants or lowly small autonomous renewable power sources. All these positives have given a positive market sentiment and hence the increased IREDA share price.
3. Favourable Policy Announcements
Thus, government policies are also the decisive factor in stock prices wherein it is often said that these policies can either make or mar the game and this applies to a football match going by the meaning above. New policies that have been issued in the recent past include elimination of importation duties on specific RE components and attractive financing options for green projects which has made the RE industry a popular one.
As IREDA is one of the key financiers of renewable energy activities, any beneficial policy is beneficial for the company only. This has in fact resulted in an increase in IREDA share price due to expected future returns arising out of such measures. If you are monitoring this stock, you have to pay close attention to policy environments.
4. Investor Sentiment and Market Trends
A fact is that feelings and emotions strongly influence the stock market rather than concrete numbers and figures. With regard to IREDA, it has noted that there has been overwhelming demand for its shares by both – retail and institutional investors. As people around the world open their eyes to issues such as global warming and an empowered domestic drive towards renewable energy, investors bring their dollar to green stocks.
Well, what it’s essentially like is a new clothing craze in the stock market — everyone wants to get with the program and go green, and the IREDA is one of the hottest stocks out there. The result? An acute increase in the stocks of the IREDA company. But, you need to consider that markets are rather volatile and can be as bipolar as the monsoon season in Mumbai.
5. Strategic Partnerships and Future Projects
So, IREDA Imagine it like a cricket team which does not only want to win the current match but also prepares for the future team. It has been actively seeking alliances with the international financial institutions and private organisations and companies for extending its project base.
There are many such alliances and developing projects which are expected to yield huge revenues in the future that is why the IREDA share price is rising continuously. For instance, partnerships with international participants towards financing offshore wind or green hydrogen projects are attributed to be highly favourable in the market due to the longer-term growth prospects.
Conclusion
This fluctuation in the share price of IREDA is not just an isolated incident but is supported by the below factors: government’s strong push for renewable energy good earnings, positive sentiments, favourable policy announcements for the company and desirable future plans of tie-ups. The key elements are elements that you can use to understand the rally in the hope of putting you in a better place as an investor
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