On Friday, shareholders of Swelect Energy Systems passed a resolution to raise the borrowing powers of the company’s board of directors from ₹400 crore to ₹750 crore.
Swelect is now on an expansion binge, which, when completed, will make it a solar supermarket of sorts. Solar companies are typically in one of the four major areas – solar power generation, production of modules and cells, manufacture of ‘balance of plant’ and provision of engineering, procurement, construction (EPC) services.
Swelect is into all of these, and is itching for more – it plans a foray into providing battery-based energy storage solutions.
First, on the manufacturing side, the company is padding up for a backward integration, by putting up a new plant for producing cells.
Only in February 2023 did the company inaugurate its new module manufacturing plant at Coimbatore, a state-of-the-art plant capable of producing modules of the latest technology – mono PERC and TOPcon, in both mono and bifacial versions.
The plant replaced the 110 MW one in Bengaluru which it acquired from HHV Photovoltaics in 2013. Barely a year down the line, Swelect is onto expanding the 700 MW Coimbatore plant capacity to 2 GW. R Chellappan, Managing Director, told businessline recently that warranty claims were less than 0.5 per cent.
Now, the company is chalking out a ₹500-crore plan for getting into cell manufacturing (cells are made into modules).
Swelect makes ‘balance of plant’, both electrical (junction boxes, AC and DC distribution boxes, voltage stabilizers) and mechanical (module mounting structures). So, for its EPC services, it has all it needs in-house.
The urge to be in every part of the value chain is also evident in Swelect’s generation business. Here again it is both in ground mounted and rooftop versions, with installed capacity of 500 MW, spread over 10,700 installations. Its sells energy to the government of India-owned aggregator, SECI, as well as directly to customers (open access).
Swelect is into direct sale of energy and the ‘group captive model’ -- a format popular in Tamil Nadu, where consumers of the electricity form a joint venture with the power company and get a share of the generation in proportion to their stakes in the JV.
Storage solutions
Chellappan says the company has started to make plans for getting into storage solutions. In a way, it is homecoming for Chellappan, who started (in 1984, when he was 31 years old) Numeric Power to manufacture uninterruptible power supply (UPS) -- the heart of which is a battery. Numeric was later sold to the French company, Legrand, in 2012, for ₹837 crore.
Chellappan told businessline that Swelect would not sell batteries but provide storage solutions (storing power for a fee), a business that is gaining traction with the demand made of renewable energy companies to supply ‘firm despatchable renewable energy’.
In 2023-24, Swelect achieved a turnover of ₹246 crore and net profit of ₹51 crore, with a net profit margin of 20 per cent. The explanatory statement to the resolution for raising the borrowing powers of the board notes that the previously approved limit of ₹400 crore “is not sufficient to meet the present financial requirements for the proposed expansion and upgradation programmes of the company.”
On the BSE on Tuesday, the Swelect share of face value of ₹10 closed at ₹1,218.25, which was ₹12.55 (1.02 per cent) lower than the previous close and trading at 36 times its per-share earnings.
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