Sunday, May 12, 2013

Will Mukesh Ambani's defence aerospace gambit pay off for RIL?

Hindustan Aeronautics Ltd (HAL), which enjoys absolute monopoly in India's military aviation, is the butt of many jokes. American defence historian and strategist Edward Luttwak refers to it as a "fossil of a company" famous for not delivering "operationally ready Tejas Light Combat Aircraft after 30 years of trying". Notes Neelu Khatri, head of defence and security advisory services at KPMG India: "HAL is overbooked (with orders). And it is a fait accompli that giants will emerge."
Khatri is referring to the "emergence" of big private sector players in Indian aerospace. One of them is Reliance IndustriesBSE 0.15 % Ltd (RIL). "They will focus more on technology partnerships and on building up infrastructure [to start manufacturing products]," she forecasts. Dhiraj Mathur of PricewaterhouseCoopers (PwC) has no doubts either. "As a company that has a track record of working on large-scale projects, it (RIL) definitely has an advantage like other players such as the Tatas and Mahindra. Having deep pockets helps," he says.
12/05/13 Economic Times