Piramal Enterprises, of the Ajay Piramal-led group, joins the list of Indian companies that see a growing opportunity in the Defence sector.
It has picked up a 27.83 per cent stake in Bluebird Aero Systems, an Israel-based unmanned air systems manufacturer, for about Rs 40 crore ($7 million). Bluebird is set to bid for contracts in India.
Piramal’s deal with Bluebird Aero Systems is considered unique as the company is an initiative of former engineers of the Israel Defence Forces. Bluebird has an agreement with Bangalore’s Dynamatic Technologies for manufacturing and marketing mini and micro tactical, unmanned aerial vehicles in India.
Companies such as Tata Motors, Mahindra and Mahindra and L&T have a presence in the Defence sector, as they hope to capitalise on the offset clause — foreign suppliers must have a percentage of local content in the orders they bag to supply to the sector. India’s Defence budget for this year is up 17 per cent to $38 billion.
BSE-listed Rossell India, which recently diversified into Defence procurement, has floated a joint venture with CAE, Canada, for simulation training solutions for the Defence sector. Following FIPB approval, Rossell India is to hold 74 per cent, with CAE holding 26 per cent share in the venture.
The venture will focus on providing training solutions for Defence procurement. An official said the Defence Ministry has specifically recognised simulation and training services as being eligible under the Indian offset criteria for Defence programmes.
Early this month, Mahindra and Mahindra and New York-headquartered Telephonics Corporations announced a joint venture to provide advanced airborne surveillance and communication systems to the Defence Ministry and Civil sector. The tie-up envisages establishing a plant at Bangalore, which will initially manufacture and service airborne radar systems being supplied to Hindustan Aeronautics.
Tata Motors will invest around Rs 600 crore on developing Futuristic Infantry Combat Vehicles. The company’s current market share in the wheeled military segment is approximately 40 per cent, and in the internal security segment is 75 per cent. “We work very closely with the Defence Research and Development Organisation on the potential needs of the forces,” said a company spokesperson.