Suzlon Energy’s acquisition of Renom Energy Services to boost market presence  

Suzlon Energy has acquired a 76% stake in Renom Energy Services, India’s largest multi-brand renewable energy operations and maintenance (O&M) firm, from the Sanjay Ghodawat Group (SGG). This acquisition is expected to enhance Suzlon’s market presence and facilitate its entry into new markets. Despite the acquisition, Renom will continue to operate independently under its board management.

Renom’s portfolio includes 1,782 MW of wind, 148 MW of solar, and 572 MW of balance of plant (BoP) maintenance services across various customer segments. Morgan Stanley, which rates Suzlon as ‘overweight,’ views this acquisition as a strategic move into the multi-brand O&M sector, noting its attractive valuation at four times the price-to-sales ratio compared to listed peers.

Analysts at JM Financial believe Suzlon, with its existing fleet of 2.5 GW across 14 turbine models and over 850 skilled workers, is well-positioned to leverage Renom’s resources to tap into the 32 GW non-Suzlon O&M market. This market is growing as India aims to achieve 100 GW of wind energy capacity by FY30. The acquisition is expected to open up new opportunities, including access to new sites and emerging re-powering projects.

Renom has experienced a fleet growth of 30% CAGR since FY20 and is projected to achieve an EBITDA of Rs 550 million in FY25, with the potential to double this figure by FY27. With an installed wind energy capacity of 20.8 GW and a 32% market share, Renom will continue to focus on the non-Suzlon wind turbine service market, which spans approximately 32 GW.

JP Chalasani, CEO of Suzlon Group, expressed optimism about the acquisition, highlighting Renom’s established market position, substantial fleet, and extensive experience with nearly 14 different turbine models. He noted that the acquisition is expected to give Suzlon an 18-24 month head start in fleet expansion and create opportunities to cross-sell turbines and O&M services to non-Suzlon customers, thereby increasing revenue potential.