New Delhi: Anil Ambani led-Reliance Infrastructure Ltd expects its defence business to contribute a large share of its revenue over the coming years.
“The defence business is expected to become a leading business vertical of Reliance Infra," Ambani told analysts on Monday evening, according to a regulatory filing sent to stock exchanges by the company on Tuesday.
Ambani estimated Indian defence business opportunities at Rs15 trillion over a 15-year period and the offset export opportunity at Rs77,000 crore.
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“Our vision is to be the leading manufacturer and supplier of state-of-art advanced weapon platforms, equipment, systems and hardware to meet the domestic requirements of the Indian armed forces. Also, to mark our presence across the world," Ambani said.
Ambani’s entry into the defence business started with its acquisition of Gujarat-based Pipavav Shipyard about two years ago.
The Pipavav Shipyard has now been renamed Reliance Defence and Engineering Ltd.
In February, Reliance Infrastructure formed a strategic partnership with Dassault Aviation to form a joint venture, Dassault Reliance Aerospace Ltd, to execute offset contracts worth up to Rs30,000 crore, the firm said. India had signed an agreement with France to buy 36 Rafale fighter jets from Dassault Aviation.
“Dassault Reliance JV will provide performance-based logistics for 50 years (scope includes maintenance, repair, overhaul and upgrades) and it is expected to execute additional orders of Rafale fighter aircraft, if awarded, for Indian armed forces under Make in India," the group said.
Reliance Infra, which is also into power transmission, engineering, procurement and construction, had a stand-alone debt of Rs15,376 crore as of 30 September, Mint reported on 21 December.
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An analyst said the defence push was promising but ambitious. “It’s a good attempt but they have to work very hard on the skill set needed for aerospace manufacturing. The skill set required is of a very high calibre. It’s not an easy job," said Laxman Behera, research fellow at the Delhi-based Institute for Defence Studies and Analyses (IDSA).
On Tuesday, Reliance Infra’s stock rose 0.17% to Rs567.35 on BSE, while the exchange’s benchmark Sensex shed 0.24% to 28,743.32 points.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.