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Adani Group will spend thousands of crores on its defence business, a sector where it sees significant growth opportunities both within India and overseas. Though it might not grow as fast as some of its other businesses, it will “definitely be sizeable enough to notice”, said Jeet Adani, the younger son of Gautam Adani and V-P of Adani Enterprises.
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Jeet Adani spoke to businessline on the sidelines of an event in Kanpur, where UP Chief Minister Yogi Adityanath inaugurated the Adani Aerospace and Defence’s ammunition factory. It is South Asia’s largest ammunition and missiles complex. Spread over 500 acres, the full spectrum of ammunition will be manufactured starting from components to artillery.
Adani said that the idea was to start with consumables in defence equipment, and then gradually move to hi-tech equipment. It will produce high-quality small, medium and large calibre ammunition for the armed forces, paramilitary forces and police. The facility has started rolling out small calibre ammunition, starting with 150 million rounds, estimated at 25 per cent of India’s annual requirement.
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The initial Investment in the project is ₹3,000 crore and will provide employment to 4,000 people. Adani said this will rise to ₹4,000 crore by 2028. He said the business did not require too much capital and it had a long gestation period. But once the business picks up, it has the potential to accelerate with good return on capital.
Adani Airports IPO
He, however, said that are other businesses in the group that will grow faster, such as green hydrogen and the new energy business. Adani Aerospace is an arm of Adani Enterprises. On Adani Airports’ expected IPO, Adani said it will not be immediate because there were certain things that have to be achieved “before we look at an IPO”. The strategy for a public listing will be rolled out in a year or so while the new airport at Navi Mumbai had also to become operational.
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