Its slapdash manner has come back to haunt India's largest wind energy company. It is a tale of caution for those expanding abroad
The coffers are running thin at Suzlon Energy, India’s largest and the world’s fifth largest wind energy company. This entrepreneurial showcase of yesterday is squeezed today in a mountain of debt, dwindling order book and a pile of inventory and receivables.
What keeps the engine chugging for now is a pipeline of orders worth nearly 1,200 megawatts (MW). Even as the orders are executed, founder Tulsi Tanti’s next big challenge will be to collect the money from customers. Thanks to the credit crunch, customers have battened down their hatches. Investment cash flows are in no better shape.
The logjam makes it difficult to raise money for acquiring a further 15 percent in Germany’s REpower, which has a superior technology that Suzlon could benefit from. But Suzlon’s frustration with REpower will not end with that. The banks that have lent to the German firm will not allow domination by the Indian owner for three years. So, despite a 76 percent stake, Tanti is nowhere near becoming an insider at the German firm.
Till he hit the Forbes List of 40 Richest Indians in 2005, not many folks had heard of Tanti. With an overwhelming 50 percent share of the Indian market, he set his sights on the global stage, gobbling up two major acquisitions: Hansen and REpower. Tanti’s business and fame grew across three continents: North America, Europe and Asia.
Today, for a host of Indian companies waiting in the wings, Suzlon is the cautionary tale of an entrepreneur — someone who took the plunge into global markets without building adequate management and technological capabilities.
And like the company’s blades, cracks in Tanti’s craftily built wind empire over 13 years are now glaringly visible.
(This story appears in the 04 June, 2010 issue of Forbes India. To visit our Archives, click here.)