other probable reasons why IREDA could continue to command a premium over REC/ PFC and REC / PFC could continue to catch up :
(1) REC PFC till date were financing thermal power projects which were having long gestation period of 4-5;years even more . The PPA normally for five years , lowered from 10 years earlier.
in comparison, renewable projects gestation period is 1- 2 years and normally PPA signed for long term 10-40 years. i can see PSP projects signed recently for 40 years.
so it goes in favour of Renewable energy financing.
That could be the reason both REC PFC are increasing their renewable portfolio. so market has re-rated these stocks.
In addition REC PFC have decided to add infra projects in to their portfolio which may be bit risky though. However the opportunities is huge in infra too.
(2) IREDA is 100% renewable and hence may continue to trade at a premium, though PE re-rating or de-rating or could take place depending upon financial performance
Discl: invested in all the 3 stocks. may be biased. not a buy sell recommendation. please do your own assessment before investment
Subscribe To Our Free Newsletter |