The Hindu Business Line : Suzlon to set up manufacturing base in US, China

Mr Tulsi Tanti (right), Chairman-cum-Managing Director, Suzlon Energy Ltd, with Mr Nimesh Kampani, Chairman, JM Morgan Stanley Pvt Ltd, at a press conference in Mumbai on Friday. — Paul Noronha

Mumbai , Sept. 16

SUZLON Energy, a leading player in wind turbine generators, has chalked out plans to expand in the international market with an investment of Rs 320 crore.

The company said it is setting up manufacturing bases in China and the US.

"After tapping the Indian market, the company plans to tap the global market for wind turbines. There is good demand for company's products," said Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy, at a press conference to announce the company's IPO.

He said the company is setting up subsidiaries in China, the US and Europe. The company will set up manufacturing units in China and the US, while the subsidiary in Europe will be for providing technology support to its global customers and for research and development.

IPO to fund investments: Part of the money raised from the IPO, which opens for subscription on September 23 and closes on September 29, will be used to capitalise these subsidiaries, Mr Tanti said.

Suzlon plans to invest Rs 220 crore in its Chinese subsidiary and Rs 100 crore in its US subsidiary.

On the rationale to set up a manufacturing base in the US, he said export of blades and turbines from India is more costly. "There are logistic problems as exporting 20-25-metres-long fibre glass blades is not feasible; and the US is importing most of the wind turbines, so there is good market for our product," he said.

The company is setting up a subsidiary in China as the local government has set a clause for 70 per cent of inputs to be manufactured locally.

Carbon credits: On the potential of carbon credits benefits available to the company as per the terms of the Kyoto Protocol, Mr Tanti said though the company will not get any benefit, its customer would.

IPO to come under old SEBI guidelines

SUZLON Energy's public issue will come under the old SEBI (Securities and Exchange Board of India) guidelines, so there will not be any proportionate allotment in the institutional investors category.

It will also not pay the 10 per cent margin money at the time of putting the application.

The J.M. Morgan Stanley Chairman, Mr Nimesh Kampani, said, "Since the new guidelines for IPO have not yet been implemented, the IPO will come under the old guidelines."

SEBI recently announced changes in IPO guidelines, where proportionate allotment of shares has to be made to institutional investors instead of discretionary allotment. As per the new norms, institutional investors will also have to pay 10 per cent margin money while applying for the shares.

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