IPO-Bound Defence Firm SMPP Eyes Tie Up With Global Firms To Accelerate Growth

As India’s defence manufacturing firm, SMPP Ltd., gears up for its maiden debut in the primary market, it is actively seeking global partnerships to expand its market presence, according to its top executive.

The company has already received approval from the Securities and Exchange Board of India and is finalising the necessary paperwork. “As soon as the team is ready, we will move forward with the IPO,” Ashish Kansal, whole time director and chief executive officer, SMPP told NDTV Profit. 

SMPP, which specialises in ammunition and armour solutions, currently supplies its products to over 23 global markets. “We are looking at partnering with more global OEMs and expanding into new international markets. The Indian defence industry is rapidly gaining traction, and our products are recognised for their quality worldwide,” Kansal added.

The company’s journey into the defence sector began with the development of the combustible cartridge case, a modern alternative to traditional brass shell casings used in tank and artillery ammunition. “Brass shells had multiple disadvantages, leading to the need for combustible cartridge cases. We started with 120mm tank ammunition, progressed to 125mm, and then moved into large-calibre 155mm artillery ammunition,” he explained.

Following the 2019 policy liberalisation that allowed private companies to fully participate in ammunition manufacturing, SMPP has been forward-integrating its ammunition offerings. “We are now developing complete artillery ammunition, starting with 155mm rounds, one of the most potent systems globally,” Bansal noted.

SMPP’s Rs 4,000-crore IPO includes a fresh issue of equity shares worth up to Rs 580 crore and an offer-for-sale of shares worth up to Rs 3,420 crore by promoter Shiv Chand Kansal, according to the draft papers. At present, Kansal holds a 50% stake in the company.

Proceeds from the fresh issue will be utilised primarily for capital expenditure of Rs 437.04 crore, which includes constructing buildings, land development, and procuring plant and machinery for a planned ammunition manufacturing facility, through an investment in a subsidiary. The remaining amount will be allocated for general corporate purposes.