Suzlon

In: Business and Management

Submitted By ginny1111
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Pages 4
SUZLON ENERGY: FINANCING PROBLEM
Q1) Discuss the various financing options available for a company to raise the required funds.
Basically, business firms need finance for two purposes:
1. To fund long-term decisions and
2. To meet working capital requirements

Long-term financing sources that a company employs:
1. Retained earnings
2. Equity capital
3. Preference capital
4. Debenture capital
5. Term loans/term finance

Short-term financing options adopted by a company are:
1. Short-term loans
2. Trade credit
3. Commercial papers

Q2) Analyse the business of Suzlon up to the FY2007-2008 since its inception.
Established in 1995, started as Textile Company and ventured into wind turbine due to energy need for textile business;
Founded by Tanti; started the buss with his own money of IRN135million
Beginning with a wind farm project he set forth to acquire the basic technology and varied expertise to set up Suzlon Energy Limited - India’s first home-grown wind technology company.
2000-market leader in india with 50%market share; Suzlon is a wind turbine company operating in India since 1995 It is world 5th largest wind turbine manufacturer. Global market share of 0.5% in 2008 it is market leader in Inida and with 50% market share in 2000. 100% growth in 2007 and 108% in 2006.

Inception of Suzlon and some problems in the beginning
• The concept of Suzlon came into being to satisfy the electricity needs of a textile co. owned by Tanti
• Tanti then set it up as a separate co. as he recognised the potential for wind power
• He faced problems to stabilize his co. and raise funds in the beginning
• He started the co. with his own money as investors were reluctant to invest in the co.
• Even the co. struggled to convince the bankers and make them support its corporate customers

Suzlon came up with an IPO

The growth and expansion plans of…...

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