Wind turbine supplier Suzlon’s initial public offering (IPO) in 2005 was nothing short of stellar. Almost overnight, its founder and chairman, Tulsi Tanti, became one of the richest people in India. At the time, the company was the fifth largest wind energy firm in the world. Two years later, it would establish itself as a major player in the sector, acquiring its German rival REpower for $2 billion (~Rs 13,000 crore). The winds of fortune were blowing in Suzlon’s favour.

Fortune, however, is fickle. Just a year later, Suzlon would begin its rapid descent from the stratosphere to rock bottom.

The company’s aggressive debt-fuelled expansion, which seemed like a smart move before 2008, became a veritable death sentence as the financial crisis sent shockwaves through the global economy. Along with the global financial crisis, Suzlon was also hit with claims that its products were faulty. This caused a sharp drop in both share price and reputation. Its reputation would take a further beating as the company was indicted by Sebi in an insider trading case related to its IPO.

The company’s mounting debts saw it gain infamy in 2012, as it defaulted on $221 million (~Rs 1,480 crore) of foreign currency convertible bonds (FCCBs). This made Suzlon the largest Indian defaulter on foreign currency loans. By this point, the aura of invincibility that Suzlon and Tanti once exuded was now a distant memory.

Since then, the company has repeatedly tried to stage a turnaround, attempting to realise the potential it once seemed so certain to fulfil. However, it’s now a decade since the first cracks appeared in 2008, and this turnaround has repeatedly faltered. Ten years is a long time. Will Suzlon eventually make it as a turnaround story?

One step forward, two steps back

In 2014-15, it seemed like Suzlon was on the road to recovery. The Indian government’s push for more renewable energy, with a target of 60 Gigawatt (GW) from wind energy by 2022, offered the company a massive opportunity.

The company also actively tried to pare its massive debt burden. Suzlon sold Senvion (formerly called REpower) in 2015 for $1.1 billion (~Rs 7300 crore) and used the lion’s share of proceeds to pay off the company’s debts. Ironically, Suzlon had taken on a lot of debt to purchase REpower in the first place. Senvion was Suzlon’s most prized possession, contributing 70% of Suzlon’s overall revenue in FY14. Its sale, however, was not a sign of the company giving up the ghost. Instead, it showed that Suzlon was willing to take hard decisions in order to emerge from the slump it found itself in after 2008.

Around the same time, pharma billionaire Dilip Shanghvi also came on board, buying a 23% stake for Rs 1,800 crore (~$269 million). The entry of Shanghvi, the promoter of Sun Pharma, was greeted with a wave of optimism by both shareholders and analysts.


Sidhartha Shukla

In his earlier stint at Moneycontrol, the website owned by the Network18 group, Sid wrote on cryptocurrencies, cybersecurity, business, and finance. Born in Raipur, Chhattisgarh, Sid has spent most of his life in Jalandhar, Punjab. He has a BSc in Mathematics from St Xavier’s College, Mumbai. Sid is a comic book nerd and a big fan of Alan Moore, Neil Gaiman and Brian Azzarello. He can be reached at sidhartha at the rate

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