Leading Rejuvenation: Central Electronics Limited (B)

In the year 2013, Dr. Nalin Shinghal was selected for the post of Chairman and Managing Director (CMD) of Central Electronics Limited (CEL). Before accepting the offer he felt the need for detailed discussion and understanding with his family before accepting the offer. CEL was a loss-making Public Sector Undertaking (PSU) with many problems of discipline, operational inefficiencies, aggressive unions, skill gaps and high employee cost. The past restructuring of the company has not led to performance improvement. At the time, CEL had already eroded its net worth by nearly 90% and was merely INR 66 Million as against a paid-up capital of INR 558 Million. A glance at its balance sheet showed a large number of qualifications reflecting the health of systems in the company. CEL was established in the year 1974 as a Central Public Sector Enterprise, under the Ministry of Science & Technology, with an objective to commercialise technologies developed by National Laboratories and Research & Development Institutions in the country. In subsequent years, it had taken up the manufacturing of a wide range of products in collaboration with various labs & institutions. CEL initially started off with manufacturing of Ferrites as its primary business. Soon afterwards, it started its two key business verticals, Solar Photovoltaics (PV) and Railway Signalling systems. CEL is credited with pioneering the growth of Solar PV in India and holds the distinction of manufacturing India’s First Solar Cell in 1977 and India’s First Solar Panel in 1978. Later in 1991-92, CEL supplied and installed India’s first Solar Power Plants (two 100 KW power plants in Aligarh and Ghosi Districts). These plants started operations in 1993. CEL had entered into the field of Solar PV in an era when the technology was largely limited to the domain of space research and there were only a handful of organisations in the field, even globally. CEL was the fourth largest manufacturer of solar modules in the world in late 1980s. CEL has played a pioneering role in a number of other areas as well, including development of Piezo elements for various applications—Ferrite based Phase Control Modules for Radar Arrays, Cadmium Zinc Telluride Substrates for night vision devices, etc. It also led the indigenisation efforts in the area of railway safety & signalling systems, in collaboration with IIT Delhi & RDSO. Over the years, CEL diversified into production of multiple products for various industries. Despite yeoman work done by the company on the technical front, it did not fare very well on the financial front and had been making losses for many years despite two financial restructuring packages that were granted to it, in addition to substantial project funding for various projects taken up by the company.