Reliance Defence aims to export naval, military equipment

Reliance Defence and Engineering is also looking to export defence equipment to other countries besides exploring opportunities in India. "While we are pursuing several opportunities in India on the naval side, we are also pursuing foreign military sales which is effectively selling defence naval equipment to other governments, other countries outside India," Ambani told shareholders at the AGM of RInfra in Mumbai on Tuesday.

"Our teams are engaged in multiple opportunities which we hope will materialise in the next few years," he added. Reliance Defence, wholly owned susbsidiary of RInfra, is looking at an integrated play in defence sector across all the verticals of army, navy and air-force, Ambani said, adding "the sector is new and it is taking baby steps in moving forward".

In January, RInfra took over the complete control of the management and control of Pipavav Defence & Offshore Engineering Co (PDOC) now called as Reliance Defence and Engineering. "The Pipavav Shipyard will be the center of excellence for everything to do with the naval operations. There are only two companies accepted by the government to build submarines, warships, to refit existing warships and existing submarines and we are one of them," he said.

Ambani also said experts from Germany, Russia, France came and surveyed the Pipavav Shipyard and have certified it as a world class facility. All of them have expressed their desire and actually signed MoUs with RInfra to come and work with it in India and transfer technology, train the employees and also provide capital, the chairman added. "So the capital is the constraint in the defence sector. It is not as capital intensive as most people think as capital is provided by the customer and in this case it is ministry of defence. 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 with the Indian Coast Guard for the first defence order for 14 fast patrol vessels, estimated at a cost of about Rs 1,000 crore. "The navy has recently sent 3 of their ships to refit to Pipavav and there are bids there, and shortly, tenders to be opened for projects on the naval side worth of over Rs 10,000 crore. So, we are deeply engaged and involved and committed to the defence sector," Ambani said. 

Ambani further said the company is also pursuing the submarines programme of the government in which the Defence Ministry is expected to place an order for 6 submarines with a value of over Rs 60,000 crore. "There are 5 public sector shipyards owned by the ministry carrying out projects worth Rs 200,000 crore but which are, on an average, running 10 years late on all programmes. So, now there is opportunity for the private sector to come in and work with the public sector and government," he said.

"We have similar initiatives on the Army side and also on the aerospace side. We have partnered with two Israel firms Rafael, for making missiles in India for the armed forces and Elbit, which focuses on home land security and border management," Ambani said. "we have recently bid for border security force for creating border fencing," added the chairman.

He further said the company will continue to look at monetising its non-core assets and has applied to the SEBI for an investment trust for its road projects. RInfra currently has 11 operational road projects. Early 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 projects similar projects in Mumbai, Cochin, Lucknow and Nagpur, among others.