How Havells India escaped its deathly cash trap in early 2000s

Cash is king. And yet, it is often sacrificed like a pawn in pursuit of growth. This is understandable. Rapid expansion comes at a cost. But sustainable businesses recognise that cash is too essential a bedrock, and that a cash squeeze requires fixing to stay afloat. Something that Havells India knows better than the rest. In this story, we look back on the time when the consumer electronics giant was struggling with a severe cash crunch and how it pulled itself out from the crisis, as recounted by CEO Anil Gupta Rai in his book 'Havells: The Untold Story of Qimat Rai Gupta.' Suggested read: Havells' high-stake gamble The growth trap In the late 90s and early 2000s, Havells was on an aggressive expansion spree. Their factory in Alwar grew from a modest five acres to a sprawling 100 acres. There was a streak of acquisitions. But, most of these investments were funded from internal accruals and debt. "Since we were not very profitable until 2002-03, there was al

This article was originally published on October 08, 2024.