Investing in IREDA's Shares? Here's Why You Need to Open a Demat Account First

It is a well-known fact that India is focusing more on green or renewable energy in its efforts to curb the adverse effects of climate change. Therefore, renewable energy has emerged as a big theme for investors as well. As a result, a lot of them think of investing in the shares of Indian Renewable Energy Development Agency (IREDA). So, if you too are keen on this sector, you should keep an eye on IREDA share price. But before you do that, you should open demat account, if you have not done that already. You need an online demat account to invest in IREDA and other shares. 

Rise of the renewable energy sector in India

• PM’s green energy vision: Prime Minister Mr. Narendra Modi has made it clear that India is aiming to achieve net zero emissions by 2070. So, by the year 2070, the amount of greenhouse gases India will emit will be equal to the amount of such gases it will remove from the atmosphere. To achieve this objective, the government and private players will have to make significant investments in green energy. Mr. Modi has also announced that India will meet half of its energy needs from green sources by 2030.
• Initiatives of the Central Government: To achieve Mr. Modi’s vision, the Central Government has announced many programs to improve the share of renewable energy in total energy consumption in India. Some of these programs include the Green Energy Corridor-Inter-State Transmission System for 13 GW RE Projects in Ladakh, the PLI Scheme for High-Efficiency Solar PV Modules, the National Green Hydrogen Mission, etc. 

As the Central Government is focusing on green energy, major players in the power sector too are fine-tuning their strategies to concentrate more on renewable energy. IREDA is one of the leading stocks in this space.

Role of Indian Renewable Energy Development Agency (IREDA) in the green energy sector

• Biggest pure-play green financing company in the country: The importance of IREDA in the green energy sector can be gauged from the fact that it is the largest pure-play green financing company in the country. Hence, if a green energy project comes up in India, it is likely that it will be financed by IREDA. So, if you want to cash in on the trend of green energy, you should track IREDA’s share price.
• Pan-India operations: IREDA’s operations are spread across the country, which gives it unique insights into green energy-related developments happening throughout India. As the share of renewable energy grows in the country, IREDA is all set to gain from it.
• Navratna status and robust financials: In April 2024, the Central Government awarded it “Navratna status.” This status is awarded to best-performing public sector undertakings. Due to its status, the company now enjoys greater autonomy and financial flexibility, which will help it perform even better than it is doing now. Besides, the company’s financial performance is robust. Based on its Annual Report, IREDA’s net non-performing assets (NPAs) stood at 0.99% in FY 2023-24. In the financial sector, a net NPA of 1% is considered a benchmark. The company’s performance is better than the benchmark in this case. Besides, its profit after tax grew by around 45% in FY 2023-24, which shows its growth trajectory. 

Open a demat account to invest in IREDA

If you do not have an online demat account, you can open demat account with an online broker, like Bajaj Broking. Keep in mind that you cannot invest in shares in India without a demat account. Hence, you should have a demat account to invest in IREDA and other shares.

Moreover, over a long period of time, shares can provide you with a much better return than other options, like bank fixed deposits. Therefore, everyone should have an online demat and trading account.