Mumbai: Reliance Infrastructure (RInfra) expects to complete the acquisition of Pipavav Defence and Offshore Company in this fiscal and would rename the entity as Reliance Defence and Engineering.
"Defence is an opportunity that is now available to the private sector which was earlier only with the public and state sector. Our entry in defence sector is in line with PM (Narendra) Modi's thinking about moving India forward, support make in india and skill in India programmes," RInfra Chairman Anil Ambani said at the company's 86th AGM here today.
RInfra, in March this year, had said that it had agreed to purchase an 18 percent stake from the promoters of debt-laden Pipavav Defence and Offshore Engineering (PDOE) for about Rs 800 crore. It had also announced that it would launch an open offer to acquire 26 percent more in the defence firm.
Ambani said if the company has to enter the naval side it will have to have a shipyard as one cannot enter the sector without a shipyard.
"We worked at the opportunity and came across Pipavav, an asset that was available for sale. We hope the acquisition process of the company will be completed this fiscal itself after we get some final approvals. Once the acquisition is completed, we will rename the company as Reliance Defence and Engineering," Ambani said.
He further said Pipavav was originally conceived as a flagship company of the skill group to do defence in the sectors of air, land or naval.
"This is how Pipavav was originally conceptualised. The only change in it post acquisition will be that it will focus on making Pipavav the naval centre of excellence. And the licences taken are in this direction. So, anything to do with naval will be done in Pipavav," he said.
Post acquisition, the company will have a new board and the CEO will be Admiral Malhi.
He said the company's focus going forward would be defence manufacturing and smart cities.
"We have recently acquired land in Mihan in Nagpur to develop an aerospace park. We hope it to be operational within 24 months from receipt of all the approvals," Ambani said.
Reliance Group will invest Rs 6,500 crore in building a greenfield aerospace equipment manufacturing facility of fixed wing aircraft, aerostructures for commercial transport aircraft, and helicopters for both defence and commercial use.
He said the company is also developing a technology innovation centre for aerospace in Bangalore.
"Currently, we are in advanced stages of discussion with a number of world leaders in the defence space for strategic partnership in this sector," he said.
Ambani further said that the company has expertise in
infrastructure, telecom, transport, EPC, utility businesses and is capable to provide turnkey solutions for smart cities.
He said the government has notified 100 cities and it will participate in a few.
Ambani further said the company's Rs 30,000-crore investment cycle in the last six years will be nearly completed this fiscal and the reverse cash flows will be felt next fiscal (2016-17).
"This will improve our ability to reduce debt and create a platform for future growth," he added.