Suzlon Energy’s shares plunge 19% reportedly due to blade supply problems
With the Wall Street Journal reporting that some problems had occurred in Suzlon Energy Ltd's supply of blades to REpower Systems AG for a project in China, the shares of the company - India's foremost wind-turbine generators' manufacturer - plunged 19 percent to Rs 55.95 on the National Stock Exchange on Thursday.
While Suzlon's blades have reportedly been rejected, the company - which owns 74 percent of Germany's REpower and is looking at increasing its stake beyond 90 per cent - denied any problem, saying that prototypes were being tested and the actual delivery would begin in a couple of months.
Sumant Sinha, Suzlon Energy's COO, clarified that only prototypes of the requisite blades had been prepared, and the company was working in tandem with REpower for getting the design specifications and quality standards approved, and start the delivery of the blades. Sinha specified: "The blades mentioned in the report are still in the testing stage. We haven't even started production yet."
Though Sinha refrained divulging the details about the size of the REpower order, inside sources say that the size is nearly $15 million, and Suzlon's liability - due to problems like delay in delivery - on this will be considerably lower.
Last year too, the shares of the Ahmedabad-based Suzlon dropped 84 percent on concerns regarding faulty blades and cancellation of orders by US customers.