Why Suzlon Share Price Getting Down? Would it Revive?
Why Suzlon Share Price Getting Down?
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Suzlon Stock Price has already fallen to its lowest but It’s still necessary to analyze the fact that ‘Why Suzlon Share Price Getting Down”. Most of the stocks are performing better than average if not at their best levels. Then Why Suzlon Energy Share Price getting Down.?
And if Suzlon Stock/firm is so downtrodden Then why Brookfield is showing interest in buying it.? There must be something which is hidden from Retail Investors. We will also be analyzing the shareholding pattern in Suzlon Stock, so You can infer Yourself whether Suzlon is one efficient stock or not.?
Talking about the Market conditions or Sector significance.
Market conditions are more or less favorable to the stock market. The renewable energy sector is one of the fastest-growing sectors, then why Suzlon Stock Price getting down.
In the past few years, a one-time darling stock Suzlon has lost all its charm and now is in the list ofdepleting-investors-money stocks list. It has lost huge wealth of Investors.
You might think there must be something very serious with the stock because of which it has fallen from Rs. 400+ to Rs. 4.20, but no. It’s just some series of events that broke the firm’s working and gradually it has gone down to this.
Ok, so it’s going to be one long research on Why Suzlon Share Going down, Sit tight and let’s unravel the history to know the future.
Suzlon Energy Share Price
Starting with Suzlon Share price, the current price of this stock doesn’t really justify its potential. Suzlon Share price is very low compared to its significance in the industry.
Suzlon stands to be the largest wind turbine maker stock in India. It used to be among the top 5 biggest wind turbine maker in the world. But in the last few quarters, Suzlon has lost its place and significance in the international market.
Talking about the firm size, Suzlon’s some of the biggest offices and R&D teams are located in India, Germany, Netherlands, and Denmark. It is hugely expanded worldwide.
According to its website, it has more than fifteen manufacturing facilities and a humongous workforce of more than 8000+.
It is one vertically integrated firm, which makes and installs wind turbines. It is also in the manufacturing business of blades, generators, panels, and tower-in-house, all the components are related to wind energy production.
Once It was ranked fifth largest and biggest wind turbine supplier in the world by MAKE.
But from then to now it has dropped its ranking out of the global top 10 due to consistent loss-making.
Suzlon Energy’s websites claim to have installed more than 17,000 MW wind energy capacity installed globally, with working in more than 18 countries
Suzlon was considered as the best stock of all Energy Sector stocks . it was one of the most favorite Stocks of the Billionaire Investor Mr. Rakesh Jhunjhunwala. But after the fall, this is not even in the consideration list after it started getting down.
While analyzing Why Suzlon Stock Price is Going down, we hit lots of marvelous and downtrodden facts about the firm. But those facts weren’t really playing any significant role in this fall, so we left them in the middle. If you still wanna read them in detail click here
So, overall the firm looks like it has done great in the past, then what led to this fall.?
If we summarize the stock price fall, in short, Promoters started ignoring the Indian market to grab the big bite of the global market. As if It was easy to crack the Global Egg. They failed drastically.
Let’s see the detailed analysis on Why Suzlon energy Share Price falling off the cliff.?
Why Suzlon Share price is going Down?
Suzlon Energy was once the darling stock of the share market. It was considered as the upcoming multibagger stock of D-street. Whether it was an investor or trader everyone had big hope with this stock.
Many investors and traders have lost huge wealth after the stock price fall for many years. Let’s see what are the reasons behind this fall in detail:
Why is Suzlon Stock Price Getting Down?
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Suzlon Energy Stock is a unique case of two opposites that is Bulls & Bears. This is not the first time when the Suzlon Stock market history has witnessed a fall in the stock price, this has happened several times in the past. But this is surely the first time when this stock has only fallen and Investors & Traders have no idea whether this will ever become out of this trap or not.
Suzlon Stock price is getting down, Investors are already in shock, but this is not the time to panic. First of all stop panicking and start thinking why its getting down and would it revive.?
This wind power giant was always one inspired case study for academics and newbie investors. Maybe this rise-fall-rise cycle was what made Rakesh Jhunjhunwala interested in the stock.
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At a time like this when India needs more renewable energy, firms like Suzlon Energy has the best opportunity to flourish again and spread itself in the market. But It’s not going to be one fairytale for the Suzlon. It has fallen to its bony knees and standing from their seems nearly impossible.
The share price of Suzlon energy has fallen multifold since its all-time high of Rs. 459 in FY08 to Rs. 2.80 (As of 11th Sep FY19) till now. Though some people point this fall towards the over-ambitious promoter who dared to chew more than they could digest.
Suzlon’s future was decided when its promoters started to ignore Indian Markets to grab the international market, as we talked earlier also. This ignorance made space for other firms like GE, Enercon, Vestas, and Gamesa. These firms grabed the opportunity and fixed their places in the domestic market which led Suzlon Energy to lose huge clients and sales in India.
There’s too many things that has been changed. Now is the time to check on the decision that you had made months ago. Suzlon Share price has gone down multifold, If you dont wanna lose more. Just cut Your positions as soon as possible.
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Great Crisis hit the Suzlon Share Price
This was not all, it was around the same time when Suzlon decided to shift from the domestic to international, the great crisis of 2008 hit the world. After the collapse of Lehman Brothers, order flow stopped from the two biggest markets of the world Europe and the US. Suzlon found it difficult to survive in the market as the credit flow had almost stopped. Amidst the crisis, Suzlon Energy had to close down its blade making factory at Pipestone in Minnesota.
Making mistakes one after the other led the firm to lose huge value not only from its share price but also from its market share/value. Suzlon Stock started falling with a free fall.
Looking at the stagnant credit flow situations, the company decided to sell off its most priced asset RE Power systems to bring order to the house. RE Power systems were operating under the name of Senvion in 2015. The whole transactions was of Rs. 17,323.23 Crores, most of which company used to pay its overflowing debt. The plan was to sale the RE Power systems, reduce the debt and revive the firm. But Maybe promoters stopped working after the second step.
R E Power was acquired by its French rival Areva. The selling of its assets and remove the debt was considered as the masterstroke of the company but they realized afterward that with this deal they have cut their own hands. Though the deal surely reduced the debt burden on Suzlon energy it also takes away all the competitive advantages from the company.
Suzlon Stock was already on a downfall, though the deal had given it one stagnant platform. But as soon as the Investors realized the company’s mistake, stock price started falling again.
In FY09 the company’s net profit had fallen by 335%, despite achieving 100% growth (YoY). The company has registered loss. It looks like from then to now they haven’t come out of the asset-sell-shock. Company hasn’t progressed a single penny from then onwards.
Interest cost has grown multifold and the company has missed out several growth opportunities offered by India and several other emerging markets due to its high debt on its books. Liquidity shortage is another big problem on this front.
Suzlon Energy Share Holding Pattern
|Institutional Investors||Approx. 5%|
Rest Shares of Suzlon Energy is Held by Others.
So You can see huge portion of its capital is help by Retail Investors which is not a very good sign. Firm can better perform when its capital is held or run by FIIs/MF/Institutionals as these are very less volatile.
Less portion in Big hands also shows that no one believes in the firm’s potential, otherwise they would have bought the huge chunk.
Let’s Move to our Next part, Would Suzlon Share price Review or survive this fall or not.?
Is there any chance of revival from this stock price fall
Suzlon Stock Price going down is one big event in our D-street that need to be analyzed wholly. And not only why its getting down but is there a chance of Suzlon Stock Price revival?
Would i ever Revive.? And if so then What can be it lifting factor, because Domestic Market is already captured by international companies.
But As we have talked earlier also we have a huge population still living without proper electricity, pollution and climate change is another big problem not only in India but worldwide. At a time like this we surely have a huge demand for renewable energy, be it wind or solar. India uses around 350KWH energy per head per year whereas USA has 7000kwh energy consumption per head per year. Huge Gap right?
India has set a handsome target of 175GW of renewable to achieve by 2022. These 175 GW includes 60GW wind energy out of India that has already crossed around 32 GW wind installations. From these 32 GW installations, Suzlon possesses around 11 GW of installations in India and more than 17GW globally.
Suzlon’s huge downfall was sole because of its over-ambitious promoters who tried to capture everything in one shot, which didn’t work. They failed drastically.
Recent changes in government energy policies to reduce dependence on coal energy and shift to better renewable energy might benefit the firm. Suzlon Energy has also improved its balance sheet a lot. But only time will tell, are they willing to gain their positions in the domestic market or not?
It would be interesting to see if they look back to the domestic market and fight to survive in here with global giants.
Suzlon Energy Share News
The stock has fallen multi-points this week and if we go on its future price predictions, experts say it might fall even further. Suzlon stock price fall was never a one day job and it wont come up with one event either.
Suzlon Stock Analysts say that its technical and fundamental data both are on its weakest path. Weakest fundamentals are behind the ‘Suzlon Energy stock price getting down’.
In the knowing of Why Suzlon Share Price Getting Down? This one looks the most important part.
According to the market experts the company’s recent bond default of Rs. 1300 crore has done enough damage to the traders and investors’ sentiment. Investors and Traders both have ‘sell’ call on this stock.
It’s not the first time when Suzlon has defaulted on loan payments or interest payments. There are murmurs that Suzlon Energy might be the next Jet Airways or Rcom of the stock market.
Shares of both the companies whether it be Rcom or Jet Airways has crash-landed. Doing much harm to the investors’ capital, SEBI had to withdraw Jet Airways shares from the cash segment. This has been done to ensure the safety of small Investors and Traders.
Suzlon Energy Stock is on the same path of defaulting on loan and bond payments and facing a huge liquidity crisis.
Experts say that Suzlon energy shares are quite weak to handle the ongoing market volatility. Due to its huge debt and cash crunch situation, Suzlon Energy is among the worst share of D-street.
Recent decisions from the company’s promoters are improving its situation but there is a long way to go before it can improve its ratings.
Simi Bhaumik, a SEBI Registered technical equity analyst also said that Suzlon Share’s technical data shows that it is highly bearish. She advised avoiding any buy call regarding the Suzlon Stock and exit at current levels. It might go down further.
Talking about why Investors are labeling Suzlon Energy stock as Jet Airways?
Jet Airway’s share price came down from around Rs. 275 to Rs. 42.70 in the last six months Juts Like Suzlon has crashed in just few days.
These days whether its Yes Bank or Jet Airways rumors/fake news has played a major role in the share price deterioration. Jet Airway’s share price saw a sharp decline after the news of bankruptcy spread in the D-street.
Though the news wasn’t new in the market, it was followed by several Interest & Loan payment defaults. Jet Airways even failed to pay salaries to its employees for several months.
Suzlon Energy also announced that it had failed to pay around Rs. 1300 crore bank bonds citing a very unacceptable reason. Reason can be anything, the fact that it pulled the stock price behind is what made the headlines.
You gotta aware of the upcoming events and news.
I think the answer to Why Suzlon Stock Price going down is because the company gives unacceptable excuses after every payment default.
Another News on Suzlon Stock
Once a darling stock of the D-street now defaulting on even on interest payments. Recent news tells us that Suzlon energy has defaulted on payments to bondholders this week. Again knocking for debt structuring solution at creditors’ doors.
After the recent default secured-creditors came to action and signed an inter-creditor agreement, under which the lenders will look to implement some strategy to resolve the stressed accounts to ease out the situations. Biggest reason because of which suzlon stock price is getting down is these constant interest and loan payments default.
The company sees the involvement of Canadian asset manager Brookfield Asset Management as a big relief. Brookfield manages over $350 billion of assets.
Earlier this month few sources have confirmed that Canadian company is in talks with Suzlon energy’s creditor to restructure the outstanding bank loans which are around Rs. 11,000 crores ($1.6 billion). This was supposed to be a one-time settlement plan.
While that’s good news for the investors and lenders, but the problem comes when the company doesn’t clarify what does it offering in return.? Brookfield has invested in yield generating infrastructure and real assets in India so far.
While the Company has still not clarified on this front, some experts are assuming that Brookfield is looking at its operations and maintenances (O&M) service business. Operations and Maintenance service business caters to almost all the Suzlon Turbines installed in Indiana and overseas markets.
This O&M service Business is the biggest attraction for the Brookfield.
Is Suzlon ready to bet it’s another profit-generating part in return to reduce the debt as it did earlier also?
It would be interesting to watch the company’s next move.
I hope now you have a better understanding of Why is Suzlon Stock price going down? and is there a chance of its revival?
Though Suzlon stock price getting down has already been explained and you know why it happened but what you might not know is Promoters are trying really hard to bring it up. Suzlon Energy’s Promoters are making new plans to make its balance sheet strong and healthy.
Stock Market was/is/will be always one mysterious game, You cannot predict it but making calculated assumptions always works.
Suzlon Energy might look one downtrodden stock at this time. But there is no second guess about the fact that it is one multi-bagger in making due to its significance. Whether its domestic market or global, It still has the power to grab that “world top 5 biggest firm in renewable energy” segment.
If you want detailed analysis, Review, and target of Suzlon Stock click Here
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