Tata group bets big on defence sector

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The $110 billion Tata group is betting big on the defence sector. Fourteen of its companies are executing defence orders worth Rs 8,000 crore.

The group has targeted revenue of Rs 2,400 crore from the defence sector in 2013-14, 40 per cent higher than last year’s Rs 1,700 crore.

From ballistics to 155 mm field guns, and high-tech items to unmanned airborne vehicles, the group not only has a foot in a large number of defence related businesses but has, in fact, emerged the largest private group collaborating with the defence forces.

The partnership is in areas like command and control, network-based warfare, including naval combat, air defence tactical communication, battlefield management systems and trusted computer platforms.

“It (defence) is a booming business. We have an order book size of Rs 8,000 crore. Many of these will be completed in one to three years,” said Mukund Govind Rajan, member of group executive council and brand custodian of Tata Sons.

Tata officials say an amphibious armoured vehicle that can front-end any battle will be ready for rollout and manufacture in two to three years. The proto-type is ready and has been approved by the defence services.

The battle workhorse is fully indiginised and superior and cost effective vis-à-vis similar vehicles from the US and Finland.

The amphibious vehicle has been developed by Tata Motors. The company has has partnered with DRDO for a light armoured troop carrier, several missile launchers and bomb disposal vans.

Tata Power’s strategic engineering division has put together a whole range of cutting edge technologies, components and gear for field formations, naval ships and the air force.

According to Rahul Chaudhry, CEO of Tata Power SED (strategic electronics division), the effort has been to collaborate with different arms of the defence services to achieve self-reliance in technology platforms, services and equipment. His company’s R&D centers in Delhi, Hyderabad and Bangalore provide complete solutions to the defence sector, he claims.

Tata Motors, Tata Power (SED), Tata Advanced Systems are the three major group firms getting the bulk of revenue from the defence-related businesses.

Tata Advance Systems, fully owned by Tata Sons, holds all the major defence licences and is a participant in all major DBM (develop, buy and make) programmes of the defence ministry.

Group officials say Tata Advance Ssystems has invested over Rs 400 crore in the five years and created production facilities spread over 450,000 sq ft. It has also created a design and development centre for indigenising missile sub-systems and mini UAVs.

Besides the defence business at home, Tata firms also looking to ramp up exports.

Tata Motors recently won a military contract worth Rs 220 crore from a United Nations peace keeping mission in Africa against stiff international competition, according to V S Noronho, the company’s vice-president for defence and government business. The defence ministry has retained the Tata companies as the lowest bidder in the tender to induct unmanned airborne vehicles. Noronho adds that over the next six months the company will supply over 500 ground vehicles to the US state department initiative funded by the United Nations.

These include ambulances, jeeps, water and fuel tankers, recovery trucks, refrigeration trucks, buses and repair lorries.

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