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Visweswara Reddy, Chairman and Managing Director of Shirdi Sai Electricals (SSEL) Group
Top domestic transformer manufacturers are saddled with orders for almost two years as India doubled down on expanding power generation base coupled with the emerging opportunity in North America to replace ageing infrastructure.
“Generally, Indian market rises for 3-4 years and then declines for 2-3 years. However, this time it is stable and will stay the same for 12-15 years due to requirement for replacement of transformers in India and North America,” said Visweswara Reddy, Chairman and Managing Director of Shirdi Sai Electricals (SSEL) Group.
Besides, India’s growing renewables base and expansion of thermal capacity is also fuelling demand, he told businessline.
The SSEL Group, which has installed more than 6 lakh transformers globally, is among India’s leading transformer manufacturers. Its EPC division has laid around 1.50 lakh km of transmission lines and built over 100 substations.
Reddy noted that there is a “solid” demand for inverter duty transformers (IDTs)— used in solar, wind, hybrid and battery energy storage systems (BESS) installations.
Rising demand
Reddy divided the transformer market into three segments—extra high voltage (EHV) transformers (220 KV and above), medium distribution transformers (such as IDTs) and normal distribution transformers.
Currently, all the quality transformer makers are booked for the next two years, particularly in the EHV segment. In the medium range distribution transformers (Inverter duty transformers) segment, there is a booking of 1-1.5 years, he added.
“Shirdi Sai and Toshiba, earlier Toshiba Electricals, are the only two companies in India that manufacture all ranges of transformers with backward integration. In fact, we are also ramping up capacity,” Reddy pointed out.
SSEL can meet India’s requirement with its current production capacity and is hoping to export at least 30-40 per cent of its transformers’ production in the medium distribution segment from 2026-2027, he said.
It has three manufacturing facilities at Kadapa (Andhra Pradesh), Chennai (Tamil Nadu) and Prayagraj (Uttar Pradesh). It is also coming up with a facility in Bengaluru.
On North American demand, Reddy said there is demand for all types of transformers as the electrical infrastructure is over 50 years old.
“The requirement for extra capacity in North America is coming at about 3 per cent. For comparison, if they do 5 per cent, it will take 20 years to replace all transformers. Even in India the requirement is going to come up shortly,” he added.
Challenges faced
Domestic capacity utilisation is constrained by supply-chain limitations and long lead times for critical items such as CRGO & amorphous steel, RIP bushing, insulations, etc, Reddy rued.
Both, cold rolled grain oriented (CRGO) and amorphous are not produced in India. The industry requires around 3.5-4 lakh tonnes per annum. Coupled with renewables, the demand will surpass 4 lakh tonnes, he added.
India, one of the largest consumers of CRGO steel, faces a 30 per cent shortfall in CRGO steel, economic think tank Global Trade Research Initiative (GTRI) stated in a report.
CRGO demand is likely to grow by 10-12 per cent annually, driven by an expanding power sector and the goal to integrate 500 GW of RE into the grid by 2030. The demand will also grow as Bureau of Energy Efficiency mandated a star-label upgrade for distribution transformers starting January 1, 2025, pushing the industry to seek higher-grade CRGO steel, it added.
Arindam Ghosh, Partner for Power Advisory at Nangia & Co, said “Transformer shortage presents a significant challenge to India’s power sector. Around 20 per cent of installed transformers are either overloaded or have surpassed their operational lifespan, increasing the risk of failures and compromised grid reliability.”
Besides, Discoms are burdened with debts of around ₹6 lakh crore, which coupled with escalating costs of transformers and potential project delays can further exacerbate their financial woes, he added.
Published on April 9, 2025
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