Tribute to Mr. Tulsi R. Tanti

 A tribute to Suzlon Founder Shri Tulsi R.Tanti

Shri Tulsi R. Tanti , the founder chairman of Suzlon Group and the pioneer of windmill and renewable energy in India is no more. I remember an episode vividly.

I was chief manager of State Bank of Travancore, Tirupur Branch during 2002-05. Accelerated depreciation and other tax benefits were extended by the central government to units, which set up wind mill projects for captive consumption of power or set-off against their power consumption from the State Electricity Boards. Mr. Tanti, himself a textile mill owner, prior to his avatar as wind turbine manufacturer, made use of the business opportunity and marketed quite a few machines to the textile mills in and around Dindigul District that had their administrative offices in Tirupur, the owners being TIRUPURians.

The bankers were new to the renewable energy concept in 2002 and were also worried that the income from the mills should be added for repayment obligations, so as to make the wind mill project a viable one. Hence mill owners, lured by the tax benefits along with the savings on electricity costs due to captive consumption, found it difficult to convince their bankers for a loan to finance the wind mill project.  All these mills had their financials audited by local proprietary/ partnership chartered accountant firms. Unsecured loans from friends and relatives, equal to or more than the paid up share capital, appeared commonly  as a source to fund the operations of the unit in almost all the balance sheets. At that time the concept of ‘rating by credit rating agencies’ did not spread among  SMEs. Banks followed their own internal rating methodologies in  grading a unit. Despite all these constraints in appraising the loan proposals, the units were in existence for two to three decades, weathering ups and downs, with improved financials shown  year after year.

Mr. Tanti took the bet and sold the units by collecting 36/60 post dated cheques representing EMIs (includes interest component) from the textile mills. I met him in the office of a reputed textile mill, enjoying sizeable working capital and term loans with us. He enquired, " Mr. Viswanathan, I offered one of the banks (a major public sector bank) in the town to finance me, at 12% interest, against the post dated cheques issued by the purchaser of the windmill and guarantee from Suzlon. The said unit is enjoying facilities with that bank since inception. All that the bank has to do for repayment is to present the cheque to itself (being the drawee) on due dates. It is like the left hand demanding cash from the right hand, flushed with money. To my surprise, the bank declined the offer. I got the loan, with the same security, sanctioned by  another bank, not having any business relationship with the said unit, within a week. Is it not an opportunity missed by the first banker, who knew the drawer of the cheque as his customer as well". I smiled and said "risk per se and risk perceptions are different. The perceptions do vary among banks"

(It is another story that banks started financing the wind mill projects aggressively since 2003, as they had excess liquidity at that time)

I am narrating the above to showcase one of the strengths of Mr. Tanti to look ahead of time. He sold wind mills on credit. Collected post dated cheques towards repayment. Converted  the same into cash immediately by getting loans against the post dated cheques issued by units, which were reputed but not rated by any credit rating agency. And his company could continue production without an interruption/liquidity constraint. These concepts are common now, but not 20 years back. Even now, SMEs do not get their finance easily. Credit rating agencies are still in the learning mode in rating SMEs appropriately. And bankers are still adjusting their expertise, in disbursing loans to SMEs on easy terms . Nursing  them faster before viability is lost is more of a theory than being practiced as a standard norm. I wish SMEs find more of manufacturers like the founder of Suzlon.

I pray Almighty sincerely to give Mr. Tulsi Tanti Sadgati. May God also give adequate strength to his family members, the employees and customers of Suzlon Group to withstand the grief and loss due to his untimely passing away.

Regards

V. Viswanathan

4^th October 2022.