Suzlon Energy’s ₹1,200 cr rights issue oversubscribed 1.8x times; share rises 3%

Suzlon Energy, one of the leading wind component manufacturing, on Thursday said that its ₹1,200-crore rights issue has been subscribed by 1.8 times. Boosted by the development, shares of Suzlon Energy gained as much as 2.8% to ₹9.15 in opening trade on the BSE.

The renewable energy company issued 240 crore partly paid‐up equity shares at a price of ₹5 per rights equity share to the eligible equity shareholders of the company, which opened for subscription between October 12-20.

“The issue resulted into subscription of 435.46 crore shares resulting into oversubscription by 1.8x times. The issue period was from October 11, 2022, to October 20, 2022,” Suzlon Energy said in a regulatory filing on Thursday.

The issue size was 240 crore partly paid‐up equity shares for cash, at a price of ₹5 per rights equity share (including a premium of ₹3 per rights equity share) aggregating up to ₹1,200 crore on a rights basis to its eligible equity shareholders in the ratio of 5 rights equity shares for every 21 fully paid‐up equity shares held by the eligible equity shareholders.

The allotment and listing formalities of the new shares on the domestic exchange – the BSE and the NSE - is expected to be completed by the first week of November 2022.  

As per the company, the funds raised via rights issue are in multiple calls – first call at time of application was ₹600 crores, which will be used for repayment or pre‐payment of a portion of certain outstanding borrowings availed by the company and its subsidiaries.  Suzlon will subsequently call in ₹600 crore as per its requirement, of which ₹316.5 crore will be used to pay off debt.

Overall, the company will use ₹900 crore from the rights issue to reduce the outstanding its debt, which stood at ₹3,200 crore as on June 30, 2022. The reduced debt burden will strengthen the balance sheet and unlock working capital to further increase its project execution and finance its growth. The company aims to be debt free in the next eight years.

Earlier this week, the Pune-based renewable energy firm secured a new order from Adani Green Energy for the development of a 48.3 MW wind power project for the billionaire Gautam Adani-led company. This was a repeat order from Adani Green Energy and was in addition to the existing order of 226.8 MW announced on August 13, 2021.

As per the company, Suzlon will install 23 units of their wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each. The project is located in Mandvi, Kutch Gujarat and is expected to be commissioned in 2023. Suzlon will execute the project with a scope of supply, installation, and commissioning. Additionally, the wind turbine manufacturer will offer post-commissioning operation and maintenance services.

Commenting on the order win, Girish Tanti, Executive Vice Chairman, Suzlon Group says, “We are delighted that Adani Green Energy Ltd has reaffirmed their trust in us for the additional order for their Wind Energy Project in Mandvi, Kutch, Gujarat. It is always a privilege to partner with India’s leading IPP in their pursuit to power our nation with green energy.”