How wind market disruption drove Suzlon to financial ruin

Mumbai: Suzlon Energy Ltd’s default on bond payments worth $172 million this week did not come as a major surprise. The company has been struggling to meet its debt covenants for some time, which was also reflected in its credit ratings.

In early April, Care Ratings downgraded Suzlon’s financial instruments and banking facilities to ‘default’ rating, citing delays in repayments. The company began missing payment obligations after a steep fall in volumes began eroding its revenues and earnings.

From an operating profit of ₹2,499 crore in FY17, the company slipped into operating losses last fiscal, as volumes fell sharply to 496 megawatt (MW). In FY17, it had garnered volumes of 1,573 MW, three times the level in FY19.