Suzlon Energy stock rises 20%, hits upper circuit; here’s why

Continuing its upward rally, the Suzlon Energy stock closed as high as 19.89% at ₹10.55 after hitting the upper circuit today. The renewable energy stock, which opened with a gain of 3.41%, outperformed the sector by 6.27% and touched an intraday high of ₹10.57 (19.98%). The stock is currently trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

After today's market closing, the m-cap of the green energy stock stood at ₹10,346.84 crore. The stock has risen 32.70% in the past five days; 37.01% in one month; 9.33% in the past six months; and 72.95% in the past year. The Suzlon Energy stock, however, is down 1.40% in the year-to-date period.

The stock rose today after the company, in an exchange filing, posted a clarification on the disclosure made by SBICAP Trustee Company Ltd. (SBICAP Trustee) in the matter of encumbrance over shares of Suzlon Energy by the promoters.

"SBICAP Trustee has recently reported the creation of encumbrance over the shares held by the promoters in the company in favour of SBICAP Trustee in terms of Regulation 29(2) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Please note that, inadvertently; SBICAP Trustee had mentioned the name of ‘Adani Green Energy Limited’ as the ‘target company’ in its reporting, instead of ‘Suzlon Energy Limited’. The said error has since been rectified by SBICAP Trustee," says the company.

The company says encumbrance has been created by the promoters of the company in favour of SBICAP Trustee, only for securing the obligations of the STG towards the REC-led consortium and not in anybody else's favour. There is no existing or new pledge by the promoters in favour of Adani Green Energy Ltd, says the company.

The Pune-based company in its quarterly financial report last month had reported a healthier balance sheet. India’s largest renewable energy solutions provider's revenue for the April-June quarter stood at ₹1,378 crore, 21% growth on a year-on-year basis. Its EBITDA was ₹214 crore in Q1 FY23 and EBITDA margin stood at 15.6%.

The company had posted a multi-fold rise in its net profit at ₹2,432.55 crore for the quarter on exceptional gains. However, the consolidated profit for Q1 FY23 stood at ₹3.64 crore.

The Suzlon Group, which is present across 17 countries, comprises Suzlon Energy Ltd and its subsidiaries. It has a cumulative global installation of over 19.4 GW of wind energy capacity and takes care of 13.4 GW of wind energy assets in India and 2.5 GW of wind energy assets under service abroad.

Notably, despite two years of the COVID-19 pandemic, 93.6 GW of wind capacity was installed worldwide, including 21.1 GW of offshore wind in 2021, which is three times more than in 2020. This indicates the upward movement of the global wind energy industry. The global renewable energy sector grew by 9.1%, within which wind energy recorded a YoY growth of over 12% during 2021.

In 2021, energy transition saw one of the highest investments totalling $755 billion, which is a new record and comes amid rising climate policy and action from around the world. Renewable energy capacity alone saw an investment of $366 billion in 2021, up 6.5% from the previous year.