Bharat Forge in talks with at least 10-12 countries for defence exports: Baba Kalyani

Bharat Forge Limited, one of the leading defence private company, is in talks with at least ten to twelve countries, including with the US), for exports of its artillery guns, armoured and protective vehicles, and components, its Chairman and Managing Director Baba Kalyani told businessline in an exclusive interview.

The billionaire businessman underlined that seventy per cent of the Pune-based listed Bharat Forge Limited’s revenue comes from defence exports and, according to Kalyani, his company is pushing government of India to sign international agreements like Safety of Strategic Arrangement (SOSA) and (Defence Federal Acquisition Regulation Supplement) DEFARS so that indigenous companies like his become eligible as a supplier and participate in global tenders for NATO and US companies respectively.

The recent India-US joint statement, issued after bilateral meeting between Prime Minister Narendra Modi and US President Joe Biden, refers to the fact that both the countries have agreed to sign SOSA which is reciprocal and mutually beneficial agreement for integration of defence supply chains of both the countries.

“We are working with at least 10-12 countries, some of them are in south-east Asia, some of the are in Africa, some of them are in Europe. Actually, we are also working with the US,” Baba Kalyani revealed cautiously, taking a plea that confidentiality clause in defence agreements restricts him from sharing details. Though the Bharat Forge, which specialises in land systems, did not announce, the firm got late last year export order worth $155.5 million, which works to around ₹1,265 crore, from friendly country for 155 millimetre ATAGs artillery guns.

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We’re in talks with 10-12 countries for defence exports: Bharat Forge CMD Baba Kalyani

Over a period of three years, the company has to supply nearly 84 guns to a former Soviet Republic country in conflict with Azerbaijan. Of that, six have already been shipped. Similarly, Kalyani Strategic Systems, a wholly owned subsidiary of Bharat Forge, recently also bagged two export orders of about Rs 850 crore from friendly countries for supply of components and armoured vehicle chassis over 18 months.

“We seriously will start bidding for international programmes. We never bid for international programmes...That’s another reform we are pushing for, that the government of India needs to sign agreements with NATO, and with the US, to include India as a supplier of defence equipment. NATO treaty is called SOSA (Safety of Strategic Arrangement) supply and second is DEFAC. Both are related to sourcing. Moment we get DEFAC we will be eligible to supply for US soldiers,” he said on his company’s ambition to become one of leading global artillery house that would also offer missiles.

For the quarter ended June 30, 2023, Bharat Forge recorded consolidated revenues of ₹3,877.27 crore, up 35.97 per cent from ₹2,851.46 crore in June 2022. The net profit for the quarter under review grew 35.85 per cent to ₹223.40 crore, as per the company.

Defence order backlog

On the defence order backlog of ₹3,200 crore, he said, “the problem is that we just got orders recently. We have to execute them in next two years. In two years, we have to get more orders of that size”. Bharat Forge is banking to recover some of it through domestic orders. It has bid for two contracts of Indian Army -- for around 300 ATAGs which would be split between them and Tata Advanced Systems Limited, and for same numbers of mounted guns.

According to Kalyani, both the orders are of ₹3,000 crore each and his company expects to get the contract for ATAGs this financial year. “ATAGs at least trials and everything is over but mounted guns, if you take current procurement cycle, it will take seven years,” he remarked.

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