Anil Ambani Spells Out His Defence Foray; Deleverages Reliance Infrastructure
Reliance Defence is one of the only two companies which could qualify for an order from the defence ministry for six submarines worth more than Rs 60,000 crore, as part of the submarines programme of the Government of India.
“With this, we will be able to transfer Pipavav Defence into a world-class naval facility,” Anil Ambani told shareholders at the AGM of Reliance Infrastructure in Mumbai on Tuesday.
In January, Reliance Infrastructure took over the complete control of the management and control of Pipavav Defence & Offshore Engineering Co (PDOC) now called as Reliance Defence and Engineering. Reliance Defence, a wholly-owned subsidiary of Reliance Infrastructure.
Reliance Defence is looking at an integrated play in the defence sector across all three verticals of army, navy and air force, Ambani said, adding “the sector is new and it is taking baby steps in moving forward”.
The company has signed two joint ventures with two Israeli companies – Rafael to make missiles for the Indian Armed Forces, and Elbit to focus on homeland and border security. With these partnerships, Ambani expects to bring world class infrastructure in defence.
If we had a world-class border management infrastructure, we could have avoided at one level at least an attack on Pathankot and on another level, an attack on Uri.Anil Ambani, Chairman, Reliance Anil Dhirubhai Ambani Group
He further said that Reliance Infrastructure has also signed MoUs with companies from Germany, France, and Russia which involve the transfer of technology, training employees and infusion of capital.
“So the capital is the least constraint in the defence sector. It is not as capital intensive as most people think. It is a medium to light capital-intensive business,” he said.
The chairman also said the company is in the process of signing a contract estimated to cost Rs 1,000 crore with the Indian Coast Guard.
He further said the company will continue to look at monetising its non-core assets and has applied to the market regulator Securities and Exchange Board of India for an investment trust for its road projects. Reliance Infrastructure currently has 11 operational road projects. Earlier this year, the company sold its cement business to Birla for Rs 4,800 crore. It is also looking at monetising its Mumbai distribution business. “Our focus is to be debt free at the standalone level,” he added.
On the metro business, he said the company is looking at similar projects in Mumbai, Cochin, Lucknow and Nagpur, among others.
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