NEW DELHI - The recent foray by tycoon Anil Ambani into India's defence industry underscores the private sector's swift expansion in this hitherto strictly government-only sector.
On March 5, Reliance Infrastructure paid $132 million for an initial stake of 18 per cent in Pipavav Defence and Offshore Engineering, the country's largest shipbuilding and heavy industry company. It wants to increase its share to at least 25.1 per cent in order to take control, with the intention of becoming "the country's biggest defence manufacturer."
The Reliance group subsidiary is also in talks with Eurocopter of France, Kamov of Russia, and Sikorsky of the US about technological tie-ups. Company sources said that the company plans to bid for upcoming tenders to make hundreds of military helicopters valued at about $4 billion. If it wins the contracts, the helicopters will likely be made in a proposed 5,000-acre defence and aerospace infrastructure facility called Dhirubhai Ambani Defence Park -- named after the billionaire's father.
Ambani is facing competition from a slew of other domestic companies also eyeing a larger share of a sector estimated to generate $100 billion in revenue over the next 10 years. Not least from his older brother Mukesh, who helms Reliance Aerospace Technologies and has a tie-up with France's Dassault Aviation. He harbors ambitions to become one of the country's largest manufacturers of combat jets.
Beefing up defence
Tata group, Mahindra & Mahindra, Larsen & Toubro, Punj Lloyd and Bharat Forge are also fighting for a bigger slice of an industry expected to generate $100 billion in revenue over the next decade.