Ghodawat Energy Ltd (GEL), the Maharashtra-based wind turbine manufacturer, plans to invest Rs 20 crore to acquire wind farms as part of its proposed Rs 100-crore expansion plan. The fund has been generated from the group internal accruals and also from debt.
GEL is currently engaged in manufacturing wind turbines and towers, and in power generation through its own wind farms. Currently, it generates 100 MW wind power with a target of reaching 500 MW by 2013.
Speaking to VCCircle, Shrenik S Ghodawat, MD, Ghodawat Energy, said, the inorganic growth route was key to the company’s growth plans. “There will be demand for good wind farms in the years to come. We are working on building up land banks in several states and acquiring wind farms,” said Ghodawat. The company is keen to acquire wind farms in Maharashtra and Karnataka.
As per Renewable Energy ministry data, the installed capacity of wind energy projects is around 10,242 MW now. Ghodawat stated that as the wind market is growing at over 20% every year, the company plans to acquire more farms to tap the potential market.
GEL supplies its electricity to the state electricity boards as well as private industries, and supplies its towers to Pune-based Suzlon Energy Ltd and General Electric. It eyes overseas markets as well including South Asia, Southeast Asia, Middle East and Africa. Some of the prominent players in the wind energy segment include Enercon (India) Ltd, Pioneer Wincon Pvt Ltd, Regen Powertech Pvt Ltd and Southern Wind Farms Ltd.
GEL is a subsidiary of diversified Sanjay Ghodawat Group, which has been in the business for the last 15 years. Besides wind power, the group has presence in FMCG, realty and infra, heavy engineering, agriculture, chemicals, education and textile sectors. GEL started its operation last year and is targeting to enter profit zone in two years.
While ruling out any immediate plans to tap the IPO market, Ghodawat said, the company would offload a small portion of its equity to strategic investors to mobilise about Rs 150 crore for the second phase of expansion beginning March 2010.
Ghodawat Group has already invested Rs 70 crore for GEL at various stages of the project development. The company is also planning to launch a new turbine manufacturing plant in Kolhapur, Maharastra with an installed capacity of manufacturing 500 turbines per annum.
In the last fiscal, the group turnover stood at Rs 1,000 crore, and is eyeing Rs 1,500 crore turnover by the end of this fiscal.
The renewable energy sector in India in which wind energy constitute a significant part, has already attracted investors’ attention, both domestic and international. According to a recent study by global consultancy firm Ernst &Young, private equity and venture capital investments in the country's renewable energy space totalled $527 million during the past four years (Jan 2005-Jul 2009), accounting for nearly a fourth of the total transaction valuations.