Suzlon Energy Ltd. is set to acquire a majority stake in Renom Energy Services Private Limited, marking a significant expansion in its operations within the renewable energy sector. The acquisition, approved by Suzlon’s board of directors, will involve purchasing 22,80,000 equity shares, representing 76% of Renom’s equity share capital. This strategic decision will be executed in two tranches with a combined value of INR 660 crore, according to a recent regulatory filing.
In the first tranche, Suzlon will acquire a 51% stake for a consideration of INR 400 crore. This initial phase will allow Suzlon to integrate Renom’s operations gradually while assessing the synergies between the two companies. The second tranche, scheduled to be completed within 18 months from the initial acquisition, involves purchasing an additional 25% stake for INR 260 crore. This phased approach provides Suzlon with flexibility in managing the integration process and optimizing its investment strategy.
Girish Tanti, Vice Chairman of Suzlon Group, expressed confidence in the acquisition, stating, “Renom has emerged as a single largest player in this domain with great strength and potential to tap further into this market segment. This acquisition aligns with Suzlon Group’s vision of leveraging growth while safeguarding our country’s renewable energy assets, irrespective of their original make.” Tanti’s comments highlight the strategic importance of this acquisition in enhancing Suzlon’s market position and capabilities.
Post-acquisition, Renom Energy will continue to operate as an independent board-managed Independent Service Provider (ISP). Renom currently manages 2.5 GW of assets and has achieved a remarkable 30% Compound Annual Growth Rate (CAGR) in fleet growth since FY20. The company boasts expertise in servicing the 32 GW and growing non-Suzlon wind turbine segment, supported by over 850 skilled personnel. This expertise positions Renom as a key player in the Indian renewable energy market, capable of capitalizing on the increasing demand for wind turbine services.
India’s ambitious target to achieve 500 GW of renewable energy installations by 2030 underscores the significance of this acquisition. With various technologies and wind turbines expected to populate the market, Renom’s capabilities position it as a crucial player in the industry’s expansion. The acquisition aligns with the broader national agenda of increasing renewable energy capacity and reducing reliance on fossil fuels.
JP Chalasani, CEO of Suzlon Group, emphasized the strategic fit of this acquisition: “With our in-house Suzlon Services Business focused on Suzlon-make turbines and now with Renom’s focus on non-Suzlon Multi Brand Renewable Energy Assets, we are comprehensively positioned across the Indian Renewables OMS sector. We intend to support and strengthen Renom further as a standalone ISP to help provide best-in-class customer service to all multi-make customers in the wind energy O&M space.”
Chalasani’s remarks underline Suzlon’s commitment to providing comprehensive services across different turbine brands, enhancing customer satisfaction, and ensuring optimal performance of renewable energy assets. This acquisition not only strengthens Suzlon’s footprint in the renewable energy sector but also aligns with India’s broader renewable energy goals, ensuring a robust and diverse energy market moving forward.
Moreover, the acquisition is expected to bring significant operational synergies and cost efficiencies, enhancing Suzlon’s overall competitive edge. The strategic integration of Renom’s capabilities with Suzlon’s existing operations is anticipated to drive innovation, improve service delivery, and support the sustainable growth of India’s renewable energy sector.
In summary, Suzlon Energy Ltd.’s acquisition of a majority stake in Renom Energy represents a strategic move to bolster its position in the renewable energy market. The phased approach of the acquisition, along with the independent operation of Renom, ensures a smooth integration process while maximizing the potential for growth and innovation in the sector. This acquisition is poised to play a crucial role in achieving India’s renewable energy targets and advancing the country’s sustainable energy agenda.
