Saturday, January 14, 2017

Suzlon Energy : Failed promise, Misplaced optimism

Suzlon Energy's website says :

Established in 1995, today Suzlon Energy Ltd. is present in 19 countries across 6 continents. We are one of the leading renewable energy solutions providers in the world. We have installed around 15.5 GW of wind energy capacity globally. With a support network of over 8,000 employees of diverse nationalities, we house one of the largest in-house Research and Development (R&D) set-up with facilities in Germany, the Netherlands, Denmark and India.

Our forte is our end-to-end offering in wind and solar energy, which provides customers with everything from land acquisition to lifecycle asset management and design to construction. This gives our customers the advantage of maximum return with minimum effort. This has been a commitment that we have been living up to in the last 21 years of our operations.

Headquartered at Suzlon One Earth in Pune, we work towards the vision of powering a greener tomorrow by enabling sustainable social, economic and ecological development.

Reality check :

Suzlon Energy hit the primary market in Oct 2005, at a price of Rs 510 a share (FV Rs10).

It is more than 10 years, the stock is trading at Rs 15.In the year 2007, there was stock split, from Rs 10 FV to Rs 2 FV. If adjusted to stock split the stock is trading at Rs 75, down Rs 435.

The IPO was lead managed by JM Morgan Stanley Pvt. Ltd., Enam Financial Consultants Pvt. Ltd.

This is a classic case where in BRLMs failed to understand the business prospects of the company, at the time IPO. 

The Result : Investors taken for a good ride.

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