CG Power & Industrial Solutions Share Price

CG Power and Industrial Solutions Ltd

CG Power and Industrial Solutions Limited (CG), formerly Crompton Greaves Limited, is a prominent player in the B2B sector, with a focus on two core business units: Power Systems and Industrial Systems. Established on April 28, 1937, as Crompton Parkinson Works Ltd in Mumbai, the company has evolved into a global enterprise providing end-to-end solutions in electrical energy management and application. It is renowned for its innovative approach and commitment to sustainable energy solutions.

Formation and Early Years

The company began its journey as a private enterprise under the name Crompton Parkinson Works Ltd. Its initial years were marked by the production of electrical equipment, with a focus on meeting the energy needs of a growing nation. Following India’s independence in 1947, the company was acquired by Lala Karamchand Thapar, a visionary industrialist who integrated it into the Thapar Group. This marked the beginning of Crompton Greaves' transformation into a major industrial force in India. By 1966, the company underwent a significant merger with Greaves Cotton Crompton Parkinson Ltd, leading to its rechristening as Crompton Greaves Limited.

Collaborations and Technological Advancements

The company’s pursuit of technological excellence began early. In 1975, Crompton Greaves forged a technical collaboration with Hitachi Ltd, Japan, for the manufacture of molded case circuit breakers. This partnership marked the onset of a series of collaborations with global leaders from the United States, Europe, and Japan, enabling the company to develop a range of high-quality products. By the 1980s, Crompton Greaves had established itself as a leader in industrial electronics, signaling systems, and vacuum interrupters, with state-of-the-art manufacturing facilities in Aurangabad and Nasik.

Expansion through Joint Ventures and Acquisitions

Throughout the 1980s and 1990s, Crompton Greaves embarked on an aggressive expansion strategy. It partnered with various state development corporations and private entities to promote new ventures. In Punjab, the company established a hydro turbine manufacturing unit, while in Goa, it set up a facility for ceiling fans. The 1990s saw Crompton Greaves entering the telecommunications sector, forming alliances for manufacturing telematics and radio communication equipment.

One of the company’s pivotal moments came in 2005 when it acquired the Belgium-based Pauwels Group. This acquisition marked Crompton Greaves’ entry into the global market for transformers and service capabilities. Subsequently, the company acquired Ganz Transelektro Villamossagi Zrt in Hungary and Sonomatra in France, enhancing its footprint across Europe. These acquisitions underscored Crompton Greaves’ commitment to becoming a global leader in power systems.

Diversification and Innovations

Crompton Greaves diversified its portfolio extensively in the late 1990s and early 2000s. The company ventured into digital technology, offering solutions for eCRM and eBusiness infrastructure. It also explored energy-efficient products, such as Amorphous Metal Transformers, in collaboration with Allied Signal Inc. These innovations aligned with the company’s vision of providing sustainable energy solutions.

By the early 2000s, the company streamlined its operations into four main business groups: Power Systems, Industrial Systems, Consumer Products, and Digital. This restructuring allowed Crompton Greaves to focus on core areas while maintaining a competitive edge in diverse markets. Its acquisition of international businesses such as Emotron in Sweden and QEI Inc. in the USA further reinforced its position in automation systems and industrial drives.

Globalization Strategy

The globalization strategy adopted by Crompton Greaves in the mid-2000s was a turning point in its history. The company acquired several leading international firms, expanding its manufacturing footprint to Belgium, Canada, Hungary, Indonesia, Ireland, France, the UK, and the US. This global presence enabled Crompton Greaves to cater to a wide range of clients, including utilities and industries, across multiple continents.

To support its global ambitions, the company established joint ventures, such as the Saudi Power Transformers Company Ltd (SPTC) in Saudi Arabia. These ventures not only enhanced its manufacturing capabilities but also opened new markets in the Middle East and beyond. Additionally, Crompton Greaves’ focus on research and development allowed it to introduce advanced products like 11 kV HT motors and substation automation systems.

Spinning Off the Consumer Business

In a significant corporate restructuring, Crompton Greaves spun off its consumer products division, leading to the creation of CG Power and Industrial Solutions Limited. This move allowed the company to concentrate exclusively on its B2B operations, which include power transmission and distribution systems, rotating machines, industrial drives, and railway transportation solutions. The decision to focus on B2B aligned with the company’s strategy to leverage its expertise in power systems and industrial solutions, positioning it as a global leader in these segments.

Strategic Alliances and Modernization

In the last two decades, CG Power and Industrial Solutions Limited has prioritized modernization and strategic alliances. The company’s acquisition of Power Technology Solutions Ltd (PTS) in the UK and its joint ventures with ZIV Aplicaciones y Tecnologia in Spain exemplify its efforts to integrate cutting-edge technology into its product offerings. These partnerships have enabled CG to deliver comprehensive solutions, from ultrahigh voltage systems to traction electronics for railways.

Key Highlights from Crompton Greaves' Strategic Moves and Achievements

Smart Grid Facility Launch

Crompton Greaves launched a state-of-the-art smart grid facility at the Global Village near Bengaluru. This facility is dedicated to manufacturing smart grid devices, which will provide numerical solutions to Indian utilities and industries in the transmission and distribution (T&D) segment. The aim is to enhance the electricity grid's efficiency and reliability.

Expansion of Power Transformer Manufacturing Capacity

The company's power transformer plant in Indonesia completed its capacity expansion, reaching 10,000 MVA with the addition of a new winding workshop. This upgrade enables the plant to manufacture 500 kV transformers, contributing to the company’s global manufacturing capabilities.

Expansion in Consumer Products Business

In FY 2014, Crompton Greaves took several steps to expand its consumer products business. These included rationalizing channel networks, deploying lean manufacturing initiatives, and increasing product offerings in premium and intelligent products. Over 11,150 new retailers and 194 distributors were added to strengthen channel transformation.

Amalgamation of Subsidiaries

Crompton Greaves approved the amalgamation of its wholly owned subsidiaries, CGZIV Power Automation Solutions Limited (CGZIV) and CG Energy Management Limited (CGEM), with the parent company. This move aimed to simplify the shareholding structure and improve operational synergies, leading to an increase in the company’s authorized share capital.

Demerger of Consumer Products Business

In 2015, Crompton Greaves’ Board approved the demerger of its consumer products business into a separate entity, Crompton Greaves Consumer Electricals Limited (CGCEL). This demerger, completed by October 1, 2015, allowed Crompton Greaves to become a pure B2B company, while CGCEL was listed on the stock exchanges.

Power Transformer Achievements and Export Orders

Crompton Greaves' T3 facility in Mandideep, which specializes in power transformers, made significant strides in FY 2015. The facility manufactured over 40,000 MVA of transformers, with a notable 175th unit of 765 kV class products being dispatched. Additionally, it secured major export orders, including from NTPC, PGCIL, and ISOLUX, showcasing its global footprint.

Record Orders in Power Transformer and Switchgear Business

Crompton Greaves’ power transformer plants in India, Indonesia, and North America secured record orders for projects in diverse markets such as Mexico, Indonesia, and Africa. The company’s Switchgear division also won significant orders for advanced products, including high-voltage transformers and current transformers.

Innovations in Smart Metering and Automation

Crompton Greaves, under its Automation division, made substantial progress in smart metering and automation solutions. The company secured a contract with Spanish utility Iberdrola to supply over 1 million ZIV smart meters in a year. Additionally, the company’s participation in the Linky smart meter project in France marked a significant achievement in global smart grid technologies.

Successful Global Exports and Orders in Industrial Systems

Crompton Greaves’ Industrial Systems business crossed the Rs. 100 crore export mark. The company successfully secured orders for large motors from clients in Saudi Arabia, France, Indonesia, and India, particularly in the power, cement, and industrial sectors.

Strategic Sales and Divestments

In FY 2016, Crompton Greaves made strategic moves to exit certain markets. The company divested its power assets in Canada and its stake in the joint venture CG Lucy Switchgear to W Lucy Co Limited. It also exited from its transmission and distribution businesses in multiple countries, including Indonesia, Hungary, and France, through a deal with First Reserve.

Reduction in International Debts and Divestment Activities

The company took several measures to reduce its international debts, including the liquidation of its branch office in Poland (Crompton Greaves Ltd SA) on December 8, 2016, and the overseas stepdown subsidiaries, CG Power Systems Brazil Ltda and Microsol Limited, on December 21, 2016, and April 26, 2017, respectively. As per the Scheme of Arrangement sanctioned by the High Court of Bombay on November 20, 2015, the trademarks associated with the company’s erstwhile consumer products business, such as "Crompton" and "Crompton Greaves," were transferred to Crompton Greaves Consumer Electricals Limited (CGCEL). The company, which now operates in a fully integrated B2B segment focusing on power transmission, distribution, and industrial businesses, retained the registered trademark "CG" for its B2B operations. Accordingly, following approval from shareholders and the Central Government in February 2017, the company changed its name from Crompton Greaves Limited to CG Power and Industrial Solutions Limited to better reflect its current business focus. The changes in the company’s structure and focus have influenced its financial performance, including fluctuations in CG Power & Industrial Solutions Share Price, as it adjusted to its new identity and market positioning.

Research and Development (R&D) Activities

During the year, CG continued its focus on developing indigenous and energy-efficient products. Key developments included the creation of a 4.5MVA 33/4*380 inverter-duty transformer for solar applications and amorphous transformers by the Power Transformers Division. The Switchgear Division also innovated with composite insulators, which helped reduce reliance on imported materials, and developed Arc-assist double-motion interrupters, which reduced the energy requirement for mechanisms by approximately 40%.

Business Achievements and Expansions

CG’s Power Systems business achieved significant growth in its manufacturing units, including record sales at its T3 facility in Mandideep and successful short circuit tests for transformers. It developed a dedicated facility to manufacture railway transformers in response to increasing orders from Indian Railways. Additionally, CG achieved milestones in the Indonesian market, securing its largest-ever power transformer order of US$142 million from PLN. These strategic expansions also had an impact on the CG Power & Industrial Solutions Share Price, reflecting investor confidence in the company’s growth trajectory.

Exports and International Business

The company continued to expand its presence internationally, achieving significant export orders in markets like Latin America, Vietnam, and Ukraine. The Switchgear Division’s GIS products, especially those for renewable energy applications, achieved notable export successes.

Financial Performance and Strategic Moves

The company’s financial strategy focused on reducing operational inefficiencies and international debts. Key divestments included the sale of its US-based subsidiary CG Power USA Inc. to WEG Electric Corp for US$31 million and the liquidation of its Saudi Arabian joint venture, Saudi Power Transformer Co. Limited. In Hungary, the company sold assets and shares of CG Electric Systems Hungary Zrt. (ESHU) for an enterprise value of Euro 38 million. These measures had a direct impact on the CG Power & Industrial Solutions Share Price, with investors showing strong interest in the company’s improved financial standing and future prospects.

Further Divestments and Strategic Refocusing

In FY 2018, CG continued its strategic refocusing, exiting from various international businesses such as the solutions businesses in the US and UK and the switchgear business in Hungary. This was aimed at improving operational efficiency, reducing debt, and enhancing shareholder value. The restructuring efforts reflected positively on CG Power & Industrial Solutions Share Price, as market sentiment improved.

Developments in Product Technology

CG’s R&D efforts resulted in the development of advanced products such as the 6 MW vertical motor for the Nuclear Power Corporation of India Limited (NPCIL) and a range of indigenous products like resin impregnated paper (RIP) bushings, 170 kV and 362 kV Externally Gapped Line Arresters, and low-tension motors suitable for explosive gas environments. The company also worked on energy-efficient products, including IE3 motors and smart control platforms.

Manufacturing and Facility Expansions

The company expanded its production capabilities with the commissioning of new state-of-the-art facilities, such as the impregnation and baking of windings at its CG Goa LTM unit and the setup of a dedicated manufacturing unit for electric traction motors for Indian Railways.

Revenue and Market Growth

CG recorded a significant increase in its revenue from both domestic and international markets. The company achieved high order intakes in several segments, such as Power Transformers, Switchgear, and Industrial Systems. Additionally, CG secured large orders in the railway sector, marking its highest-ever order input in FY 2018. These results were reflected in a positive movement in the CG Power & Industrial Solutions Share Price, which attracted investor attention due to the company’s robust growth.

Recent Developments (2020-2021)

In 2020, the company further streamlined its operations by divesting from CG Service Systems France SAS and launching indigenously developed products like the 40.5kV SF6 Gas Circuit Breaker and 12kV Ring Main Unit for smart distribution applications. The company also relaunched a range of fast-moving electrical goods (FMEG), including domestic pumps, fans, and new varieties of surge arresters and current transformers. As the company introduced new product lines and improved operational efficiency, it saw favorable movements in the CG Power & Industrial Solutions Share Price, reflecting growing investor confidence.

Quick overview

CG Power and Industrial Solutions Limited’s journey from a small private enterprise to a global leader in power and industrial systems is a testament to its resilience, innovation, and strategic foresight. With a rich history of technological advancements, collaborations, and acquisitions, the company has positioned itself as a trusted partner for utilities, industries, and transportation systems worldwide. As it continues to innovate and expand, CG Power remains committed to its mission of delivering efficient and sustainable energy solutions across the globe.