Moser Baer shares sink as Indian PV makers flounder

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Shares of Moser Baer flopped to an all time low as India’s leading PV manufacturer struggles to take advantage of the fast growing Indian solar market, and attempts to get its arms round its debt mountain, reports Recharge.

Concerns are growing within India about the failure of local manufacturers to make much of a dent in the Indian PV market, which added nearly 500 MW in 2010 and 2011, and, despite many remaining challenges, is expected to expand feverishly over the coming decade.

Delhi is eager to create and maintain a large and sustainable domestic solar market to meet India’s gaping energy gap. But an important secondary motivation for establishing the National Solar Mission (NSM) was to foster a new, competitive manufacturing sector capable of competing on the global stage.

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The country is off to a good start on the former point, but lurching towards failure on the second.

Industry sources estimate that 60 per cent of the modules used in NSM projects to date have been based on thin film technology such as that supplied by First Solar–which faces no local-content requirements at present.

Indian manufacturers are pressuring the government to close the thin film loophole for future tender rounds, but Delhi is aware that doing so may jeopardise the entire solar programme, given the relatively nascent state of India’s homegrown suppliers.

Moser Baer, which diversified into PV from its core business in optical media storage, has blossomed into one of India’s leading solar engineering, procurement and construction contractors. Its manufacturing business, however, has shown less spectacular results.

Moser Baer Solar chief marketing officer Vivek Chaturvedi recently acknowledged that he is “actively engaged with the government, and [expects] a significant policy intervention” to aid Indian manufacturers.

In order to achieve the government’s vision of having 5b GW of manufacturing capacity in India by 2020, “the industry needs to be provided with a level playing field”, he says.

Moser Baer is currently attempting to restructure more than US$ 700 million of loans and bonds, according to press reports.  Chief financial officer Yogesh Mathur says Moser Baer is contemplating selling new five year bonds to cover the nearly US$ 90 million in Foreign Currency Convertible Bonds it has coming due in late June.

Among other impending capital outlays, the company recently announced plans to upgrade its cell manufacturing process to better compete with high end foreign rivals.

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