Incorporated in 1974, CEL, under the tutelage of the Ministry of Science and Technology, is a pioneer in the field of solar photovoltaic (SPV) and has developed the technology with its own R&D efforts. It has also developed axle counting systems which are used in railway signaling systems for safe train movement.
The government had issued an expression of interest (EOI) request on February 3, 2020, following which three EOIs were received. However, only two companies – Nandal Finance and Leasing Pvt Ltd and JPM Industries Ltd – submitted financial offers before October 12, 2021.
While Ghaziabad-based Nandal Finance and Leasing bid for Rs 210 crore, JPM Industries quoted Rs 190 crore.
“The Alternative Mechanism … approved the highest priced bid from M / s Nandal Finance and Leasing Pvt Ltd for the sale of GoI’s 100 percent stake in Central Electronics Ltd (CEL) – a relevant CPSE from the Department of Science and Industry Research (DSIR). The winning bid is Rs 210,00,60000, “an official statement read.
The Alternative Mechanism (MA) on CEL’s Strategic Divestment consisted of Minister of Road Transport Nitin Gadkari, Minister of Finance Nirmala Sitharaman and Minister of State for Science and Technology Jitendra Singh.
The next step will be to issue the Letter of Intent (LoI) and then sign the share purchase agreement.
The transaction is expected to be finalized during the current 2021-22 fiscal year (ending March 2022), the statement added.
Based on the valuations of the transaction advisor and the asset appraiser, the government had arrived at a reserve price of Rs 194 crore for the CEL.
The higher of the two price offers, submitted by M / s Nandal Finance and Leasing Pvt Ltd, was found to be above the reserve price, the statement said.
This is the second time that the government has initiated the process of strategic divestment of CEL after the Council of Ministers of October 27, 2016 approved its divestment. In the first iteration, no financial offer was received. The sales process resumed in February 2020.
This is the second strategic divestment from current taxation. In October, the government decided to sell 100% ownership of Air India and Air India Express as well as its 50% stake in ground handling company AISATS to Tata Sons for 15,300 crore rupees, the first privatization in 20 years.
Air India’s sale process is expected to be completed by December.