Suzlon & Dilip Shanghvi Part Ways, But Both Sides Remain Positive

27 September 2023
3 mins read
by Angel One
Shanghvi and Suzlon management are optimistic about the company's future in wind energy, citing its strong financial position and operational excellence, which has been upgraded by CRISIL.
Suzlon & Dilip Shanghvi Part Ways, But Both Sides Remain Positive

According to Suzlon’s notification to the markets, Dilip Shanghvi and Associates opted to terminate the modified and restated shareholders’ agreement agreed in February 2020 on Tuesday evening. Hiten Timbadia, the investment group’s nominee director on Suzlon’s board, resigned on September 26. However, the wind turbine maker has stated that the termination will not affect the company’s operations.  

Shanghvi and his enterprises will continue to be investors in the company, expressing excitement about the future and prospects of wind energy and its importance in achieving net-zero objectives. They support the management’s aggressive growth and attempts to reclaim market share.  

Suzlon’s board of directors adopted a debt restructuring proposal in February 2020, following the RBI circular dated June 2019. The business issued up to 100 crore equity shares, 4.1 lakh 0.01% secured Optionally Convertible Debentures, and up to 50 crore warrants under this arrangement.

Read: Suzlon Will Issue NCDs Worth 4.4k Crore

The board authorised the issuance of equity shares worth Rs 1,000 crore, with Shanghvi Finance Pvt Ltd and Aditya Medisales Ltd receiving shares or instruments from the corporation. Sun Pharma’s promoter purchased a 23% interest in Suzlon Energy for Rs 1,800 crore in 2015.  

Shanghvi expressed his intention to participate in the rights offering, which will generate Rs 1,200 crore in 2022. Suzlon allocated 10 million shares to Shanghvi family members and firms, bringing his total interest to 23%. Dilip Shanghvi’s family members and firms owned at least 7.4% of the company in the June quarter. 

Suzlon Group, a global leader in renewable energy solutions, has seen a 231.27% increase in its stock price in the last year, showcasing its commitment to sustainability. The company, headquartered in Pune, India, has deployed over 20 GW of wind energy capacity across 17 nations. Suzlon’s order book, which includes a backlog of 1,433 megawatts as of June 30, 2023, and an additional 149 megawatts, is substantial and diverse, indicating a promising future for the company. The company’s commitment to sustainability has attracted investors worldwide. 

In a recent development that further underscores Suzlon’s growing strength, CRISIL, a reputable rating agency, upgraded the ratings of Suzlon Energy Ltd. to ‘CRISIL BBB+/A2’ from ‘CRISIL BBB‐/A3‘. This upgrade comes with a positive outlook for both long-term and short-term facilities. It reflects the company’s robust financial position, operational excellence, and favourable tailwinds within the renewable energy sector. 

The termination of the shareholders’ agreement between Suzlon Energy Ltd. and Dilip Shanghvi and Associates is a significant development. However, it is important to note that both parties have stated that they remain committed to the company and its future prospects. Suzlon has a strong management team and a well-diversified portfolio of products and services. The company is also well-positioned to benefit from the growing demand for renewable energy solutions in India and around the world. Investors who are looking for a long-term investment in the renewable energy sector should consider investing in Suzlon Energy Ltd

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.