- The Indian government has issued an EOI for interested bidders to bid for 100% stake in CEL
- Companies with a minimum net worth of INR 500 million as on March 31, 2019 eligible to apply
- Shortlisted bidders will move to RFP round where in they will be expected to make an offer to buy CEL
The Government of India is divesting its 100% stake in engineering arm Central Electronics Limited (CEL) and is seeking interested buyers globally. CEL is the government’s solar PV technology company with 38 MW of installed PV module manufacturing capacity, comprising a 10 MW manual line and a 28 MW automated line.
The public sector undertaking (PSU) also caters to other industries making products for railways, strategic electronics and integrated security systems. Operating under the administrative control of the Department of Scientific and Industrial Research (DSIR) of the Ministry of Science & Technology, CEL is up for grabs under an expression of interest (EOI) issued by the government.
Selected bidders will be required to lock in the shares for a period of three years during which it cannot undertake the sale of its stake in CEL. The process for the transaction has been divided into two stages. Under stage I, the EOI will be evaluated, shortlisted bidders will move to stage II and receive request for proposal (RFP) documents.
Eligible companies will be those private limited or public limited firms registered under Companies Act 1956 or 2013. Those public firms where government ownership is 51% or more will not be allowed to participate. The bidder must prove a minimum net worth of INR 500 million ($7.02 million) as on March 31, 2019.
In a SWOT analysis for CEL in the EOI, the weakness outlined for the company is its weak financial position due to past losses, high manufacturing cost and non-payment of dues by state nodal agencies that further impacts its finances. The threats it faces are from dumping of solar cells at very low rates which makes solar PV manufacturing in India unviable, at the same time the entry of new players in the market for solar products and for railway signaling systems are other challenge it faces.
Interested bidders can submit their EOIs by March 16, 2020, the same day these will be opened. Documents are available on CEL’s website.
Previously, a similar EOI was launched in September 2018.
The decision for this ‘in-principle’ strategic sale of CEL was taken by Prime Minister Narendra Modi led government in 2017 and is one among several such public sector entities it has decided to privatize including Bharat Petroleum Corp Ltd (BPCL), Shipping Corporation of India and Air India among others.