Suzlon Energy Limited has made a significant strategic decision to merge its wholly-owned subsidiary, Suzlon Global Services Limited, with the parent company.
Suzlon Energy Limited, a leading company in the wind energy sector, has achieved a major success under its restructuring proposal. The company announced on Friday that it has received a "No Adverse Observation" letter from the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This consent is part of the Scheme of Arrangement presented in May 2023, through which the company is seeking to strengthen its group structure.
Global Services to be Merged
Under this proposed plan, Suzlon Energy is going to merge its wholly-owned subsidiary, Suzlon Global Services Limited, with its parent unit. This step is part of the company's strategy to simplify its corporate structure and make operations more efficient. This merger is expected to reduce the company's administrative and operational costs.
Now Awaiting NCLT Approval
Following the approval from the stock exchanges, the next step is approval from the National Company Law Tribunal (NCLT). The company had already obtained approval from its shareholders and creditors for this scheme in August 2024. Now that the exchanges have also issued a 'no objection' letter, this proposal will soon be presented to the NCLT.
Why This Merger is Necessary
Suzlon Global Services Limited is the unit of the company that primarily handles the repair, maintenance, and technical services of wind turbines. Its merger will increase the operational efficiency of the parent company, Suzlon Energy, and the corporate structure will also become more integrated. This step is also expected to bring transparency in financial accounting and regulatory compliance.
Suzlon's Strong Grip in the Wind Energy Sector
Suzlon Energy is one of the leading wind turbine manufacturing companies in India. The company establishes and operates wind energy projects in many parts of the country. In addition, the company's Operations and Maintenance Services segment is also b, which provides long-term services to customers.
Slight Enthusiasm Seen in the Stock Market
In the trading session on Friday, shares of Suzlon Energy saw a rise of 0.6 percent and the share closed at the level of ₹65.65. Although this increase was minor, more activity may be seen in the stock on Monday after the merger received the green signal. Investors will now be watching to see when the NCLT approves this merger.
The Share Has Given a Strong Return in the Last One Year
Suzlon Energy's stock has proved to be very beneficial for investors in the last one year. The company's share was around ₹20 in 2023 and is now trading above ₹65. During this time, the share has performed as a multibagger several times, especially when the company started focusing on repaying its old debts and business reorganization.
What Could Be the Impact Going Forward
According to market analysts, if approval is received from the NCLT soon, the merger process could be completed by the third quarter of 2025. After this, changes will be seen in the company's balance sheet and structure, which may increase investor confidence.
This merger will strengthen Suzlon Energy's operations, and its credibility in the market could also be strengthened. All eyes will be on the share's movement in the Monday session.
