Suzlon acquires 51% stake in Renom Energy; stock rises 4%

Shares of Suzlon Energy rose as much as 3.83% to ₹68.80 apiece on Wednesday after India’s largest wind turbine manufacturer acquired a 51% stake in Renom Energy Services Private Limited to bolster its operations and maintenance (O&M) services in the wind energy sector.

The scrip opened higher at ₹68.90 against the previous closing price of ₹66.26 on the BSE, in sync with the strong broader market. The company’s market cap stood at ₹93,709.48 crore at the time of reporting.

Suzlon share rose 24.76% over the past month, while it gained 39.84% in the past six months, and increased 78.88% year-to-date (YTD).

Suzlon in an exchange filing says that the acquisition will occur in two tranches: an initial 51% stake to be acquired within three months for ₹400 crore, followed by an additional 25% stake within 18 months for ₹260 crore. Suzlon plans to acquire 76% of Renom's equity in multiple phases, with the entire stake acquisition costing ₹660 crore. This move will enable Suzlon to pursue O&M opportunities for over 32 GW of non-Suzlon wind energy assets in India.

Renom manages around 2.5 GW of assets, including 1,782 MW in wind energy, 148 MW in solar energy, and 572 MW in balance of plant (BOP) energy across various customer segments, with a turnover of ₹213 crore for the fiscal year ending March 31, 2024.

Renom, established in 2015 by the Sanjay Ghodawat Group, is a multi-brand O&M service provider in India. Despite the acquisition, Renom will continue to function as an independent service provider, managed by its own board, the company adds.

Following the completion of the acquisition, Renom will become a subsidiary of Suzlon Energy Ltd. Suzlon’s board has approved the execution of a sale and purchase agreement (SPA) and a shareholders’ agreement (SHA).

The acquisition enhances Suzlon Group’s presence in the non-Suzlon segments of the Indian wind energy services industry, it adds.

Suzlon Energy reported a 200% increase in profit after tax (PAT), reaching ₹302 crore in Q1 FY25, compared to ₹101 crore in the same period last year. The company's revenue surged to ₹2,016 crore in June 2024, up from ₹1,348 crore in the previous year’s quarter, marking a 50% increase. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) rose to ₹370 crore in Q1 FY25, compared to ₹199 crore in Q1 FY24.