IREDA shares locked in 10% lower circuit; what should investors do next?

Indian Renewable Energy Development Agency (IREDA) shares were locked in the 10 per cent lower circuit in afternoon deals on Friday, December 15, pausing after a rally that lasted seven sessions in a row. At 2 pm, the stock of the recently listed renewable lender was frozen with a loss of Rs 12, or 10 per cent, at Rs 108.2 apiece on BSE.  

IREDA shares entered the listed space with a bang on November 29, at a premium of 56 per cent over the upper end of the price band of the company’s IPO.  

Buy, sell, or hold IREDA shares? Here’s what investors may do next 

"The prevailing question revolves around potential trailing levels for those opting to retain their positions. Anticipating testing of the Rs 80 to Rs 92 range in the near future, it is advisable to wait for this range before considering fresh long positions,” said VLA Ambala, a SEBI-registered research analyst and co-founder of Stock Market Today (SMT). 

Ambala also said that investors who are comfortable with averaging and holding may contemplate doing so within the aforementioned range. Future targets could range between Rs 115 and Rs 350, with a stop loss at Rs 60, she added.

The stock has good long-term valuations and is trading at higher multiples, said Bigul CEO Atul Parakh.  

Parakh anticipates that the store will level out from its present levels and then somewhat correct itself to the 95–100 range, which will be favourable for short-term traders to enter the market.  

For long-term investors, he recommends “riding the wave and hanging onto the stocks in their portfolios”. 

Omkar Kamtekar, Research Analyst at Bonanza Portfolio, recommends buying IREDA shares on dips, citing the company’s bright outlook.  

"We would suggest investors who were allotted the shares in the IPO and who bought on a listing day to book part profits and continue to hold for the long term. IREDA is a strong public sector company with a bright outlook and hence, fresh entries should be made on dips," said Kamtekar.  

Harsh Goela, Co- founder, Goela School of Finance has an optimistic view for long term on the stock.

"The company's strengths, such as a comprehensive data-based credit appraisal process, being the largest player in green financing with a strong customer base, and offering innovative products, add to its appeal. Furthermore, the cost-effective long-term sources of borrowing and growth drivers like urbanization, round-the-clock power demand, rural electrification, Make in India push, railway electrification, and the electrification of mobility infrastructure contribute to the positive outlook. Considering these factors, I believe holding IREDA shares aligns with the promising trajectory of India's renewable energy landscape, making it a compelling choice for long-term investors," he said.

What should traders do?

Jigar S Patel, Senior Manager-Technical Research at Anand Rathi Shares and Stock Brokers, sees support for IREDA shares at Rs 110 and resistance at Rs 130.  

Patel expects the stock to move within a range of Rs 100-140 for the next couple of months.  

IREDA share price: Past performance 

Since its listing at Rs 50 apiece, shares of IREDA has gained over 116 per cent against Nifty 50's rise of over 6 per cent in the same period. 

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