Anil Ambani enters wind power

Ambanis never misses an opportunity be it energy, telecom, financial services or retail. The latest sector on their radar now is wind power and that, too when Suzlon, the pioneer player in the sector enjoys a market cap of Rs 30,000 crore.


Anil Ambani, after lying low for quite a while, has struck again. His Company Reliance Capital Ltd (RCL), along with a clutch of private investors, has acquired close to 68% controlling stake in Southern Wind Farms Ltd, a sister company of the South-based NEPC group.

RCL paid Rs 92 crore to acquire 51%, while ace-broker Nimesh Shah acquired 13% for Rs 15 crore and Sterlite chief financial officer Tarun Jain acquired 4% in the company. Reliance Capital officials refused to comment on the deal.

The remaining stake will be held by public shareholders of NEPC Micon with a share swap ratio of 19 shares for every 100 shares held in NEPC Micon. The deal has given a valuation of Rs 180 crore for Souther Wind Farms Ltd.

Khemkas will utilise Rs 180 crore to clear their debts to lenders like IFCI and IDBI and make it a zero debt company with a domestic airline operator's licence, sources familiar with the development said.

If you go by Suzlon's track record, Reliance Capital will not be limiting its business to just set up wind power farms.

It has to break from being a wind mill player to an integrated player with presence in both turbines and gensets which would bring down power costs to as low as Rs 1.2 per unit (kilo watt) from Rs 1.8.

Suzlon, last month completed its integration plan, by acquiring the world's largest genset maker Hansen Transmission International in Sweden for $565 million (Rs 2514 crore). The gensets triple the power capacity received from the wind mill.

Anil had acquired a habit of snapping up companies which has a huge upside. A 51% stake in Adlabs and 44% stake in the Delhi-based courier firm DTDC was in this direction.

Considering global demand for wind energy and carbon credits, Reliance Capital's buyout may pay off once it transforms itself to an integrated player.

As per projection made by the Ministry of Non-conventional Energy Sources, 10% of the 240,000 MW installed capacity requirement by 2012 will come from renewables.

It is envisaged that 50% of this capacity or 12,000 MW may come from windfarms and the total installed capacity is around 1000 MW.

Global demand for wind power will be driven by that in China and India. Share of wind energy in the global energy market is expected to rise to 3% from 0.2% by 2030.