Suzlon plans expansion

Wind turbine manufacturer, Suzlon Energy Limited plans to expand and set up manufacturng units in China and US. A part of the money raised from the IPO which opens for subscription on Friday will be used to capitalise on the subsidiaries in these geographies. The price band has been fixed at between Rs 425 and Rs 510.

On the need for setting up a manufacturing centre in US, Girish R Tanti, director of Suzlon Energy Limited said there are logistical problems as exporting 40-45 metre long rotor blades is cumbersome and also the US is importing wind turbines. "There is a good market for our products," he added.

The company is setting up a subsidiary in China as the Chinese government has stipulated that 70 per cent of the inputs have to be manufactured locally.

Tanti also said that the company is considering mergers and aquisitions of product vendors as a part of its backward integration strategy.

The forthcomng IPO will have 29.34 million shares of Rs 10 each. Of this 26.76 million equity shares will be fresh equity by Suzlon, while Citicorp International Finance Corporation which is a shareholder, will make an offer for sale of 2.5 million equity shares.

Of the total issue "� 5.85 lakh shares will be reserved for permanent employees of Suzlon and 60 per cent of the net issue will be offered to qualified institutional buyers. The balance will be split between non-institutional investors (10 per cent of the net issue) and retail investors (30 per cent of net issue).

Suzlon recorded revenues of Rs 1,965.92 crore in 2004-05 as compared to Rs 270 crore in 2001-02. Its net profit increased from Rs 27 crore in 2001-02 to Rs 365.33 crore in 2004-05.

Its accumulated sales were 1,126.6 MW as on March 31 last. Suzlon has installed 42.8 per cent of the total capacity installed in India during the year-ended December 31, 2004. It has design and R&D teams and facilities in Germany, Netherlands and India.