After acquiring Pipavav shipyard, Anil Ambani goes big on defence, raises 11 new companies

NEW DELHI: After acquiring the Pipavav shipyard, Anil Ambani has made his firmest step into the defence industry, creating a cluster of companies and applying for over a dozen licences in the past weeks to design, develop and manufacture military equipment ranging from UAVs and spacecraft to submarine systems.

In a quiet move, Reliance Defence Limited (RDL) has raised 11 new companies focused on defence — each of them targeting a potential market of at least Rs 10,000 crore. These companies, executives say, will be used as joint venture partners with foreign manufacturers looking at the Make in India initiative or for licence production of equipment. It is also looking to export defence products from India.

In a firm indication that his interests go beyond just ship building and helicopter manufacturing, Ambani has applied for at least 13 new licences to develop and produce military systems, with the hope for clearances by the end of this year. “The group will aim at a leadership position in the sector and is committed to deliver on time and give the best value proposition,” Rajesh Dhingra, President, Reliance Defence &Aerospace Pvt Ltd told ET, confirming the developments.

The applications show that RDL is keen on entering the core markets of land systems, unmanned aviation, defence electronics, submarine construction, production of missiles and development of engines for all platforms. Going beyond the conventional markets, RDL has also sought permission to manufacture spacecraft and satellites. Besides, the group is also looking at the lucrative maintenance, repair and overhaul (MRO) business for both aircraft and naval vessels. The MRO business is being planned to give life cycle support to products that RDL supplies to the military.

Senior executives say that the company has been getting positive responses from global defence manufacturers that have been in talks over the past few months. As reported by ET, Anil Ambani has been personally driving the defence business and has met the leadership of almost all major defence manufacturers around the world. “The response from global OEMs has been exceptional and commitments received have the potential of transforming Indian defence industry in the next ten years,” Dhingra says.  The business plan of RDL is believed to be based on the estimation that the requirement of military hardware in the next decade would exceed $250 billion.

RDL has also been on a hiring spree, picking up executives for its head office in Delhi as well as preparing the formal takeover of the Pipavav Shipyard. The company has already hired the former head of the MDL shipyard, Vice Admiral HS Malhi to take over its naval systems business and more big hires are expected soon.

At present, RDL is in the race for several defence contracts, including a $ 2 billion order for landing platform docks (LPDs) which is nearing finalisation and two helicopter manufacturing projects worth over $3 billion that are in the initial stages.

Ambani goes big on defence