Reliance Infra expects defence to become its leading business vertical
Anil Ambani's Reliance Infrastructure believes that defence sector provides it with an opportunity that will make it its leading business vertical.
In a BSE filing, Reliance Infra said, “The company is committed to develop a robust defence business contributing significantly to the national security and to be self-reliant in defence segment. It is confident in becoming one of the leading defence companies in India.”
Reliance Infrastructure's defence has progressed in the last 13 months, with many acquisitions and contracts taken place.
To strengthen its footprint in defence business, Rinfra acquired Pipavav Defence Offshore and Engineering Company Limited (PDOECL) in January 2016, and renamed it Reliance Defence and Engineering Limited (RDEL).
Through RDEL, the company received 27 industrial licenses in last year for manufacturing of various defence hardware / equipments for Army, Navy and Air Force. Such would be the highest number of Industrial Licenses for any Defence Company in India.
Naval defence market size is estimated to be more than Rs. 3,50,000 crore in the next 15 years, said RInfra.
Globally, Reliance Infra has set earmarked many major contracts in its portfolio. One of the major agreement was with Dassault Aviation, France, where it bagged a contract to set up 36 Rafael Aircraft. This is the largest offset contract in the country at approximately Rs 30,000 crore.
RInfra expects the market segment of Rafael aircraft to reach at Rs 60,000 crore in India by next 15 years.
Also, the US Navy selected Reliance Shipyard to provide services to its 7th Fleet consisting of more than 100 ships. Currently, Reliance Shipyard is the only Shipyard in India capable of building a new Aircraft Carrier of 65,000 Ton and above.
Last month, RDEL has signed a contract to build 14 Fast Patrol Vessels (FPVs) for Indian Coast Guard. It also signed strategic partnership with Antonov, Ukraine for Transport Aircraft.
Anil Ambani's RInfra feels that outlook of defence business in India is robust, looking at the recent budget allocation in the sector which is at Rs 2.62 lakh crore for FY18, an increase of 5% over the last years budget.
"India will have Rs. 86,000 Crore of defence expenditure in the year 2017-18. This will offer large opportunities for Indian Private Sector Defence Companies, given renewed thrust by Government of India towards “Make in India” in the Defence sector, " RInfra said.
Considering the defence market outlook in India ahead, Reliance Infrastructure has now planned to place an experienced team for implementing the plans and initiatives in Defence sector. The team comprises of more than 2,000 professionals and over 200 plus senior management executives.