Suzlon's Rs 400-Crore Interest Cost To Flow Through After Debt Reduction
The company raised Rs 2,000 crore via QIP and is looking to become net-debt free.
Suzlon Energy Ltd. incurred an interest cost of Rs 400 crore in the previous fiscal that will now flow through after the company's debt reduction into the profit before tax, according to Chief Financial Officer Himanshu Mody.
The renewable energy solutions provider had raised Rs 2,000 crore via a qualified institutional placement on Aug. 14., of which Rs 1,500 crore will be utilised for debt repayment.
The balance Rs 500 crore will be used for issue expenses, capex and working capital requirements, Mody told BQ Prime's Sajeet Manghat in an interview.
The company expects to pump in Rs 1,500 crore into debt repayment as it aims to go net debt-free after 15 years, on a consolidated basis. The gross debt stands at Rs 1,800 crore on a consolidated basis, as of the first quarter of the current fiscal, according to Mody.
CFO Himanshu Mody. (Source: Suzlon Energy)
"The last part of the capex is towards enhancing or adding capacities for our 3-MW turbine, which has seen a very good response from our customers," Mody said. "So, the capex we incur this year would enable us to deliver significant orders for the 3-MW turbine, largely for FY25."
The order book of the company stands at 1.6 gigawatts, on a consolidated basis, of which the mix is 55% from the 3-MW turbine and 45% from the 2-MW turbine.
From an installed base perspective, the company has a capacity of 3-4 GW from a mix of its 2-MW and 3-MW turbines, he said.
"Policymakers have issued a bidding calendar, which requires that at least 10 GW of wind bid wins will happen in one financial year and this calendar is valid for the next four–five years," he said, highlighting the significant capacity addition that is likely to happen.
"In 2017, the industry did about 5.5 GW and those are all 2 MW machines," he said. "So, there is no reason why we, as an industry, cannot do 8-10 GW or even more in a year on a high-powered machine."
The country has already added about 1.1 GW of capacity during the first quarter of FY24. If that figure is annualised, "one is looking at anywhere between 4–5 GW of capacity addition in this year itself, which is more than double the capacity additions that have happened over the last few years", he said.
