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The Union Cabinet on Friday approved listing of Indian Renewable Energy Development Agency Ltd (IREDA) on stock exchanges through an initial public offer (IPO) by part sale of government's stake in the public sector entity.

The aim is to raise funds through issue of fresh equity shares by the IREDA, official sources said.

Department of Investment and Public Asset Management (DIPAM) will drive the listing process, the sources added.

This decision supersedes the earlier Cabinet Committee on Economic Affairs (CCEA) decision taken in June 2017 which had allowed the IREDA to issue 13.90 crore fresh equity shares of Rs 10 each to the public on book building basis through IPO route.

The instant decision has been necessitated due to change in capital structure following infusion of capital to the tune of Rs 1,500 crore by the government in March 2022.

The IPO will help in unlocking the value of government's investment on one hand, and on the other hand, will provide an opportunity to the public to acquire stake in the national asset and draw benefits therefrom.

Besides, it will help the IREDA in raising a part of its capital requirement for meeting growth plans without depending on the public exchequer, and improve governance through greater market discipline and transparency arising from listing requirements and disclosures.

The IREDA is a wholly owned mini-Ratna company, engaged in financing of renewable energy and energy efficiency projects in India.