Mumbai: Leading wind turbine maker Suzlon Energy Ltd is planning to re-enter the international markets, chief executive J.P. Chalasani has said. Pune-based Suzlon was on a leveraged expansion spree when the global markets were good and used to draw close to 60% income from overseas operations until 2008, when the global financial crisis took its toll on investments in the renewable energy sector.
“There was a time our exports were more than our domestic revenue," said Chalasani. “Then we went through a financial crisis—forcing us to slow down our international business and stabilize whatever assets we have." “But now that we have regained our market position, we are planning to re-enter international market shortly. We hope to get some orders as early as next quarter." Suzlon plans to re-enter the US, Europe and the neighbouring countries, Chalasani added.
Suzlon has undergone debt restructuring—bringing down debt significantly by divesting part of its international operations. In January 2015, the Tulsi Tanti-led firm sold German subsidiary Senvion at equity valuation of €1 billion.
According to Chalasani, Suzlon, which had bought the German renewables major Repower in its heydays and then exited, currently has 5,500 MW in installed capacity outside India.
“We began re-looking at getting back into international markets last year, and we have already strengthened our organization, and also appointed a new chief executive for this. We hope to get some global bids from next quarter itself," Chalasani said. The contribution of exports will be lower compared to domestic business as they will go very cautiously this time around.
Speaking about the opportunities in the domestic market, Chalasani said: “Lower tariff is the key to the sector. One major thing is the shift from feed-in-tariff to tariff-based competitive bidding."
“So far, 7,500 MW has been awarded under SECI I, II, III, IV plus Maharashtra, Gujarat and Tamil Nadu put together. Of this, we have the largest market share of close to 25% of tied up capacity. “Keeping that in mind, I don’t see why we won’t maintain our lead position in terms of billing and bidding and maintain 25% share of the total bids awarded," he said.
Currently, bids for 10,000 MW in renewable energy are out which will be finalized over the next two months—a huge opportunity for Suzlon. “Our focus on R&D has helped us move from 90 metre to 120 metre tower height and now they are introducing 140 metre in a short span of one year," Chalasani said.
When asked about the company’s debt position, the CEO said, “We will bring down our debt by 30-40% debt latest by December 2018 through asset monetization. As of March 2018, our net debt stood at ₹ 6,000 crore."
Suzlon continues to own 100% of its domestic assets and has strategic presence in select overseas markets. According to its current shareholding pattern, 20% of Suzlon is owned by promoters, 19% by Dilip Shanghvi Family and Associates and 5% is with lenders. The rest is with institutional and retail investors.