According to reports, “We have decided to sell and not be in the business as it is capital-intensive ,” Venu Srinivasan , chairman and managing director of TVS Motor Company, said.
The company set up the energy business in 2010 with an investment of Rs 37.5 crore, under two subsidiaries TVS Wind Energy Ltd and TVS Wind Power Ltd. The company has a capacity of 59.5MW, of which 25.5MW was commissioned last year in Maharashtra. All the projects have been registered with the United Nations Framework Convention on Climate Change (UNFCCC) under Clean Development Mechanism (CDM) for carbon credits, according to the company’s latest annual report.The energy division of TVS earned revenues of Rs 43.62 crore in 2012-13 , and made a profit of Rs 4.50 crore during the year compared to a Rs 7.34 crore loss the previous year.
TVS’ exit from the wind business comes at a time when the wind industry in the country is in trouble over policy issues , which is leading to several companies selling off a portion of, or their entire wind assets. Industry experts say that with the slowdown in the economy, bankers are forcing several companies that have invested in their non-core businesses and raise funds, resulting in companies like TVS selling off stake in the energy business.
“The sale by TVS indicates that the industry has matured and that independent power producers (IPPs) are buying such second-hand wind turbines with a proven generation track record. It makes sense for them to buy from established companies who own good wind machines and own good sites. Also, companies like TVS could sell assets to IPPs and purchase power from them for captive use,” said Vineeth Vijayaraghavan , founder and editor on renewable energy-focused newsletter Panchabuta.