Making A Turbinator

What does one make of Dilip Sha­nghvi’s investment in wind turbine maker Suzlon Energy? In choosing a non-pharma company to deploy part of his enormous wealth, Shanghvi appears to have acted on the belief that investing significantly in other pharma companies would lead to concerns over conflict of interest.

Shanghvi has shown no interest in taking over the reins at Suzlon yet. A few years ago he spoke of the power sector as a wealth-creating opportunity that is not as attention-guzzling as pharma. But this still leaves some unanswered questions—what if Suzlon does not meet his expectations under chairman Tulsi Tanti? Shan­ghvi has said that it would take “substantial and sustained effort on the part of the management team to achieve a significant operating performance improvement.”

As one Shanghvi observer puts it, he is not one to sit by and watch his money “go down the drain”. Two, what if Suzlon needs more capital and Tanti cannot oblige? Three, will this dilute his attention on Sun Pharma as it digests its biggest deal ever, the purchase of Ranbaxy? And if so, can Sun manage with a little less of Shanghvi? Sun’s stock market valuations do not suggest any overt investor concern. Time will tell.