The demise of Tulsi Tanti throws Suzlon's plans into uncertainty. How will it recover from the blow?
Promoter Tulsi Tanti's demise throws open some challenges for the wind energy major
- Oct 14, 2022,
- Updated Oct 19, 2022 5:23 PM IST
The passing of Tulsi Tanti, Chairman of Suzlon Energy, has put the company he founded in a bit of a tricky situation. In July 2020, the company completed the restructuring of over Rs 12,000 crore of its debt, after having gone through the same process four times in the past decade. The debt is the result of expensive acquisitions that did not work out well. But with the restructuring in place, there is a lot to look forward to from the wind energy major, especially with India pushing hard on the renewable energy pedal. “If one looks at the overall renewable energy story in India, wind is an important part,” says Mahesh Singhi, Founder & MD of mergers & acquisitions advisory firm Singhi Advisors, who also feels that Suzlon is currently on a good wicket.
From an industry point of view, old wind turbines will now make way for more efficient options. Also, the emergence of the offshore model would work in wind energy’s favour. “Wind was historically onshore and a lot of challenges around land acquisition will be taken care of [when one moves to the offshore model],” says Deven Choksey, Managing Director of brokerage firm KRChoksey Securities.
But for Suzlon to make good on this opportunity, it needs to get a few things in place. “With the restructuring done, the company needs capital to get back on track,” says Singhi, adding that the presence of Sun Pharmaceuticals’ Promoter and MD Dilip Shanghvi as a white knight in this case is a plus. Shanghvi had picked up a 23 per cent stake in Suzlon in 2015.
Meanwhile, the company will be led by Tulsi Tanti’s brothers. Vinod R. Tanti has been appointed Chairman and Managing Director, while Girish Tanti has been made Executive Director and Executive Vice Chairman for three years.
In FY22, Suzlon had consolidated revenues of Rs 6,604 crore, with a net loss of Rs 166 crore compared to the consolidated top line of Rs 3,366 crore in FY21 and Rs 3,000 crore in FY20.
Over the past two decades, the company has installed over 19.4 GW of wind energy in 17 countries, including 13.4 GW in India. Of concern to investors is the poor performance of its stock. (It trades at around Rs 8 compared to its offer price of Rs 510. There was a share split in 2008 resulting in its face value now at Rs 2 from Rs 10.) “The stock price is a reflection of the strength of the balance sheet and the potential in the business. Once it gets capitalised, things can look up,” says Singhi.
For many years, Tulsi Tanti was the face of Suzlon, and according to Choksey, he was the driver of the restructuring process. It is up to Tanti’s brothers to take the legacy forward.
@krishnagopalan
The passing of Tulsi Tanti, Chairman of Suzlon Energy, has put the company he founded in a bit of a tricky situation. In July 2020, the company completed the restructuring of over Rs 12,000 crore of its debt, after having gone through the same process four times in the past decade. The debt is the result of expensive acquisitions that did not work out well. But with the restructuring in place, there is a lot to look forward to from the wind energy major, especially with India pushing hard on the renewable energy pedal. “If one looks at the overall renewable energy story in India, wind is an important part,” says Mahesh Singhi, Founder & MD of mergers & acquisitions advisory firm Singhi Advisors, who also feels that Suzlon is currently on a good wicket.
From an industry point of view, old wind turbines will now make way for more efficient options. Also, the emergence of the offshore model would work in wind energy’s favour. “Wind was historically onshore and a lot of challenges around land acquisition will be taken care of [when one moves to the offshore model],” says Deven Choksey, Managing Director of brokerage firm KRChoksey Securities.
But for Suzlon to make good on this opportunity, it needs to get a few things in place. “With the restructuring done, the company needs capital to get back on track,” says Singhi, adding that the presence of Sun Pharmaceuticals’ Promoter and MD Dilip Shanghvi as a white knight in this case is a plus. Shanghvi had picked up a 23 per cent stake in Suzlon in 2015.
Meanwhile, the company will be led by Tulsi Tanti’s brothers. Vinod R. Tanti has been appointed Chairman and Managing Director, while Girish Tanti has been made Executive Director and Executive Vice Chairman for three years.
In FY22, Suzlon had consolidated revenues of Rs 6,604 crore, with a net loss of Rs 166 crore compared to the consolidated top line of Rs 3,366 crore in FY21 and Rs 3,000 crore in FY20.
Over the past two decades, the company has installed over 19.4 GW of wind energy in 17 countries, including 13.4 GW in India. Of concern to investors is the poor performance of its stock. (It trades at around Rs 8 compared to its offer price of Rs 510. There was a share split in 2008 resulting in its face value now at Rs 2 from Rs 10.) “The stock price is a reflection of the strength of the balance sheet and the potential in the business. Once it gets capitalised, things can look up,” says Singhi.
For many years, Tulsi Tanti was the face of Suzlon, and according to Choksey, he was the driver of the restructuring process. It is up to Tanti’s brothers to take the legacy forward.
@krishnagopalan