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In the largest-ever deal in the Indian Defence sector, Anil Ambani-controlled Reliance Infrastructure (RInfra) will buy 18 per cent of Pipavav Defence and Offshore Engineering Company for about ₹819 crore. RInfra will also get the sole management control of Pipavav Defence.
RInfra, together with its wholly-owned subsidiary Reliance Defence Systems, will acquire 13 crore shares at ₹63 per share. The acquisition will be followed by a mandatory open offer at ₹66 per share, the company said in a statement. Reliance will also buy additional shares at ₹63 each to ensure its stake is not less than 25.10 per cent.
“This is a unique opportunity for Reliance Group to participate in Prime Minister Modi’s ‘Make in India’ programme for the high growth Defence sector,” said Anil Ambani, Chairman of Reliance Group. On completion of the open offer, Pipavav Defence’s board will be reconstituted with Ambani becoming chairman. The current promoters will retain a minority stake and two non-executive board seats.
According to sources, BM Munjal-led Hero Group and M&M had evinced interest in Pipavav Defence, which has capabilities in building submarines, aircraft carriers and warships.
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