“In March 2020, our debt was approx ₹13,000 crore. We’ve reduced it to about ₹2,800 crore now, and it will further go down to ₹1,800 crore after the Rights Issue this month. Why do you worry now?” Tulsi Tanti, founder-chairman of Suzlon Group confidently said about the group’s improving debt levels and bright future while talking to media on October 1 at Ahmedabad.

Same evening after reaching Pune, the 64-year old renewable energy stalwart suffered a fatal cardiac arrest. He is survived by his wife Gita, two children - son Pranav, and daughter Nidhi.

Expressing his condolences, Prime Minister Narendra Modi said, “Shri Tulsi Tanti was a pioneering business leader who contributed to India’s economic progress and strengthened our nation’s efforts to further sustainable development. Pained by his untimely demise..”

Introducing wind energy

Born in Rajkot, Gujarat to a farmer-turned-construction entrepreneur, Ranchhodbhai Tanti, Tulsi pursued studies in Commerce and Mechanical Engineering and ventured into synthetic textiles business in Surat. Having realised the infrastructure bottlenecks for growth in synthetic textiles, Tanti thought of addressing the root cause, i.e. unviable electricity costs. Back in 1991, he spotted the solution in wind energy and invested in wind turbines, which led to formation of Suzlon Energy in 1995.

For the Indian renewable market, Tanti came from nowhere and got the country introduced to the highly-complex and specialised technology of wind energy and brought it to its glory. “About 25 years ago, this sector was not known much. He had to face a lot of resistance from all sides. But he did not give up. That was his commitment to the sector and his business,” said Anil Kane, a veteran wind energy expert and once associate of Tanti on Suzlon Board.

Globally, when there are only about a dozen wind turbine makers, Tanti has been successful in placing Suzlon on the global map.

Starting from the ground up; piling up debts

Tanti knew that the high capital-intensive wind turbine manufacturing and the windmill business couldn’t be a self-funded enterprise. He relied heavily on institutional finance combined with public money through an IPO in 2005 at ₹510 a share raising ₹1500 crore. In the meantime, the company added huge capacities in manufacturing - at 3100 megawatt (Mw) spread across over 16 ‘windy’ states with an installed wind energy capacities of 19.44 gigawatt (Gw), including 5.96 Gw outside India.

But in doing so, it built huge pile of debts on the books. Over the past decade, the company had to undergo four rounds of debt restructuring, refinancing, and resolutions to retire debts and stay afloat- first in 2010, then in 2012, 2016 when Sun Pharma’s Dilip Shanghvi rescued Tanti by taking 23 per cent stake in Suzlon for ₹1,800 crore and finally, in 2020. In fact, in 2019, despite the turnaround after the capital infusion from Shanghvi, the company almost went to the verge of bankruptcy in 2019, and Shanghvi had the threat of a near-off in his investments. After months of negotiations, the lenders finally okayed Suzlon’s request for restructuring in July 2020 between the company and lenders when they took a haircut of over 65 per cent of their exposure.

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Two biggest hits

To sum up, two things very costly for Tanti, that he could never shrug them aside. One, the 2007’s overseas acquisition of REPower, which costed him dearly in terms of piling on debt. A deal valued at ₹1,746 crore, resulted in Tanti leaning on foreign currency convertible bonds to fund it. Suzlon, which was a Nifty company back then, trading at ₹1,300 a share, never saw these levels again. Second, was the unexpected withdrawal of accelerated depreciation scheme under the Income Tax Act. While it was reintroduced two years later, 2012’s untimely withdrawal did enough damage to Suzlon’s financials while it was undergoing debt restructuring. 

In the latest, Suzlon has launched its ₹1,200-crore Rights Issue, which will help company retire further ₹900 crore of debt leaving behind a “comfortable” about ₹1800 crore of debt on books. As of today, the company has an orderbook of 800 Mw of wind installations, which it expects to go up further once debt levels reduce thereby improving its eligibility for further working capital arrangements. In June 2022, the company’s net debt reduced to ₹2,774 crore from ₹5,796 crore, thanks to the latest rounds of debt refinancing.

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Paying respects

On his untimely demise, top business leaders paid their respects, Vedanta Group chairman Anil Agarwal wrote, “We lost a visionary today. Tulsi Tanti was the hero of India’s Green Energy revolution. A business pioneer, an inspiration for our own green quest and a dear friend.”

Sumant Sinha, founder and CEO of ReNew Power expressed his shock and grief saying, “Many of us owe a lot to him. Truly a loss for all of us.” “He was truly one of a kind,” he added. Heading the Renewable Energy Council of Confederation of Indian Industry (CII), Tanti propagated government’s green energy policies like Panchamrit calling it as a “future of India’s energy security’.