Adani Group to enter defence manufacturing space

[mundaire]

Several months back a friend had told me that the Adani group is planning to enter the defence/ armaments industry. I had not paid any attention to it then, but today I saw this news article. It seems like the defence sector is taking the "make in India" philosophy seriously.

http://economictimes.indiatimes.com/new ... 766250.cms

Adani Group seeks licence to manufacture warships, naval vessels
By Manu Pubby, ET Bureau | 2 Sep, 2015, 03.37AM IST

NEW DELHI: Ahmedabad headquartered Adani Group is seeking a licence to manufacture warships under its newly floated defence arm.

The conglomerate is also evaluating options to set up a greenfield shipyard in Gujarat, besides leveraging its significant land holding for a defence manufacturing park, people aware of the development told ET.

Adani group had earlier applied to the Department of Industrial Policy & Promotion (DIPP) for a licence to manufacture helicopters under the new entity, Adani Defence Systems & Technologies Ltd.

The group is also putting in place a team to identify military projects, the persons cited earlier said. Adani group declined to comment.

According to industry executives, Adani is yet to tie up with a foreign partner for defence manufacturing, but it is seeking licences in areas of interest that would be leveraged when a final decision is taken on specific projects. The group joins a list of conglomerates that are eyeing India's defence manufacturing space. For instance, Anil Ambani-led Reliance group is acquiring Pipavav shipyard.

One of the persons cited earlier said Adani had evaluated shipyards in the country for possible investment, but not found any attractive proposition. It is learnt that the group is considering setting up a shipyard close to its main asset—India's largest private port and special economic zone at Mundra.

Some executives said that Adani's preliminary evaluation has shown that given available modern technology and the land that the group has, it could be more economical to construct a new shipyard rather than invest in an existing one, which may be saddled with debt.

[aadhaulya]

Good for India. But what about us lesser mortals struggling to get better weapons at a reasonable cost as opposed to unreasonably priced weapons that are 30 to maybe 100 or more years old.

Atul

[Katana]

These guys are opportunists. They'll probably take a license and sit on it, now that they have a 'friendly regime'in Delhi. Moreover, they are doubtful to enter into small arms manufacture. The likelihood is for the more 'techy' stuff.

[PRITAM PATEL]

These guys are opportunists. They'll probably take a license and sit on it, now that they have a 'friendly regime'in Delhi. Moreover, they are doubtful to enter into small arms manufacture. The likelihood is for the more 'techy' stuff.

Absolute correct Katana,

Adanis will ( most probably )make profit by subletting or selling ( like 2G spectrum )

[ankur_ank007]

These guys are opportunists. They'll probably take a license and sit on it, now that they have a 'friendly regime'in Delhi. Moreover, they are doubtful to enter into small arms manufacture. The likelihood is for the more 'techy' stuff.

Absolute correct Katana,

Adanis will make profit by subletting or selling ( like 2G spectrum )

Completely agreed Pritam Ji.

[jashwantsinh]

adding to that, There are several more like Ambanis, Tatas etc. in the line to apply/acquire license for Defense arms production.
it could be merely delightful to those who are seeking for technically advanced small arms both for Shooting Sport and self
protection purpose.

[ankur_ank007]

adding to that, There are several more like Ambanis, Tatas etc. in the line to apply/acquire license for Defense arms production.
it could be merely delightful to those who are seeking for technically advanced small arms both for Shooting Sport and self
protection purpose.

Tata Strategic Division is already in this business since ages. One of my friend is also working there but as per my discussion with him, they have no plans to enter into Small Arms manufacturing. He also informed me that the Government do not want the monopoly of OFBI to be challenged in anyway, specially for the civilian arms and ammunition as it is one of the businesses which proved to be a golden geese for Indian Government.

Regards

[zombie]

None of the big guys have any plans for small arms manufacturing. Why manufacture and sell 1,00,000 rifles when you can make more profit by selling an artillery battery? As far as domestic market of armed forces and police is concerned, they are shadowed by big ticket items like artillery, missiles, tanks, drones, MPVs, etc. Civilian small arms market does not even figure on their radars.

Ideally government should open up small arms manufacturing for SMEs. Right now minimum investment cap is around Rs. 50 crore.

It is funny to see Adani and Reliance enter in to defence game without even remotely relevant experience. Even more funny is it to see Russians selecting Pipavav (owned by Reliance) preferred ship yard for building new set of Talwar-class frigates.

[Chengy]

1,00,000 rifles at Rs 1 lakh per rifle is Rs 100 Crores.. About the cost of one ship or aircraft.. Why should they bother

[ckkalyan]

Definitely an interesting development for India.

Thanks for sharing mundaire.

[mundaire]

1,00,000 rifles at Rs 1 lakh per rifle is Rs 100 Crores.. About the cost of one ship or aircraft.. Why should they bother

Because the of profit margins. The IOF 30.06 rifle is sold at at least 5 times cost of manufacture, in the case of handguns (at IOF prices) retail prices are as high as 10 times cost of manufacture!

Not many manufacturing industries where that kind of profit margin is available.

[hvj1]

Ever heard of a small fry entering any of the big ticket industry? Yet to read on the Board Index of an IFGian getting a big ticket licence.
The Rich will become richer and the poor will get poorer. And the Rich get richer by reaping the sweat toil and blood of the working class, the ones who have no surplus capital.
The entire world is ruled by a super rich club, where the entree is restricted to top level politicians (those who can run for the post of president, prime minister or dictator) and the Business men who have the money to produce stuff lapped up by the the 'have nots'.