Suzlon Energy shares tank 5% amid huge turnover; stock snaps 7-day winning run on fundraising plan

Shares of Suzlon Energy hit their 5 per cent lower circuit limit in Wednesday's trade amid heavy turnover after the company said it would consider raising funds on Friday. On NSE, sell orders stood at 10,13,51,041 shares till 10 am. On BSE, there were sell orders of 2,22,93,956 Suzlon shares during the same period.

Suzlon Energy had, post Tuesday's market hours, said its board of directors will meet on Friday to consider and approve capital raising by way of one or more or combination of permissible methods. The company board will also seek approval of the shareholders, if required.

Suzlon Energy shares hit their lower circuit limit at Rs 17.46, snapping a seven day winning run. The stock had jumped 35 per cent in the seven-day period.

Turnover on the counter stood at Rs 416 crore in the first 45 minutes of trading on NSE. Suzlon's BSE turnover stood at Rs 42.87 crore.

ICICI Securities recently initiated coverage of Suzlon Energy, saying it is best equipped to benefit from industry tailwinds. The brokerage expects a sharp uptick in Suzlon Energy earnings from FY24Eonwards. The brokerage has recommended a share price target of Rs 22 on the stock, valuing it at 24 times FY25 EPS.

The domestic brokerage said Suzlon Energy is getting back into shape after a ‘rollercoaster’ journey over the last decade due to a slump in industry volumes and high leverage led by the acquisition of Repower in 2008. However, after a series of debt restructuring, net debt has declined sharply from Rs 13,000 crore in FY20 to Rs 1,200 crore as of Mar’23. In addition, the industry is looking at a revival led by a slew of policy actions.

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ICICI Securities said the Indian power grid needs more wind in its mix. The need to enhance wind capacity addition (post-subdued activity in the recent past) has finally dawned upon the stakeholders.

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