HAL plans to get listed; to restructure board by April 1

As part of the government’s disinvestment programme, state-run Hindustan Aeronautics Ltd (HAL) plans to get listed as one of the Maharatna companies, for which it will restructure its board by April 1.

Besides, the company is looking to enhance its focus on aeronautical technology segment, rather than being only a manufacturing firm, HAL’s outgoing Chairman R K Tyagi said today.

“In last almost three years, we have tried to convert HALfrom a manufacturing company into a technology company… we have made efforts… For the preparedness for tomorrow,” Tyagi told reporters here as he prepares to demit office on January 31.

“HAL board in the last two years has given us approval for more than Rs 7,000 crore of investment where an aggressive modernisation is taking place,” said Tyagi who joined HAL as its Chairman in March 2012.

“We have prepared the company externally and internally … The company is planning for the future, reinvesting for the future, and I’m sure the valuation of the company is going to be very relevant,” he added.

Tyagi said “our dream is to see the company as a Maharatna company which have more than 5,000 patents, a company which will be fully responsive to any of the leads of the defence sector and also in the exports.”

Responding to a question on disinvestment Ashok Tandon, Company Secretary & Executive Director of HAL, said: “Disinvestment process is in progress, there were couple of issues… One was the restructuring of the board for which we have got approval from the competent authority in the government, it will be in place by April 1, 2015, and the other was sharing of confidential information with the book running lead manager which we have to sort out….”

In reply to a question on restructuring of the board, he said, “Now we have nine whole time directors, six independent and two government directors; the revised structure provides for five whole time directors including CMD, two government nominee directors and seven independent directors.”

To a question on exports, Tyagi said “if you look at the export market 60 per cent of the formal exports of the Defence PSUs is accounted by HAL; if you have to export products in the international market you must have certification….”

“Last two years we have started this exercise, those certifications are now in advanced stage and hopefully by the end of this year we will have both these certifications and then we will be able to establish good export market to our products.”

In addition to this, he said a presentation had been made to Minister for External Affairs and “we have put forward that our neighbouring countries will be a very good markets to start with, as far as our products are concerned.” He noted the handing over of Dhruv Helicopter to Nepal last November and contract from Mauritius for Dornier Aircraft.

India is ramping up amphibious capabilities with warships

India is on its way to indigenously build four warships, which will be the biggest-ever made in the country other than the under-construction 40,000 tonne sea-borne aircraft carrier the INS Vikrant.The Ministry of Defence (MoD) had re-issued a request for proposal (RFP) to Indian private sector shipyards in September to build four amphibious assault ships, also called the Landing Platform Docks (LPD) in naval parlance.

Each of these will approximately cost Rs 6,000 crore and are expected to deliver over the next 10 years.Each of these ships will be anything between 35,000 and 40,000 tonnes. The Indian shipyards have been asked to locate their own foreign collaborator. “The bids have come in,” a source in the Navy said. The RFP was sent to ABG, Larsen & Toubro (L&T), and Pipavav Defence and Offshore Engineering.The successful private shipyard and its foreign collaborator will be given order for two such ships and the two others will be made by the MoD-owned Hindustan Shipyard Limited, Visakhapatnam, at the same price being paid to the private builder.

This signals an important change in the long-term strategic plan as this will be huge jump over the existing capability of launching offensive sea-borne. The LPDs are essentially the first step towards increasing capability to launch “out-of-country operations”.The LPDs are essentially a modern-day sea-based version of the Roman epic “Trojan horse”. Each carries, in its huge lower deck, hundreds of Indian Army troops with tanks, vehicles and cargo. Such a ship can deliver men and equipment near a sea beach and does not need a berthing dock, hence providing the option for landing thousands of troops near a spot chosen to attack.

The size of the LPDs indicates the Indian Navy’s growing amphibious warfare capacity. As of now, the biggest such variety of vessel is INS Jalashwa, a 16,900 tonne ship. Another five warships classified as Landing ship tank large (LST-L) are some 5,600 tonnes each, another four ships are just 1,100 tonnes and lastly the smallest are 650 tonnes and six of these are in service.

Forces that move across sea are referred to as “amphibious task force”. At present, India has the capability to move a Brigade, some 5,000 men, using the lone LPD, INS Jalashwa, along with a fleet of five smaller 5,600-tonne (LST-Ls) each of which can carry 10 tanks, 11 combat trucks and 500 troops.Each of the new LPDs will have three times the capacity and have multi-role helicopters, including heavy lift helicopters to provide even greater flexibility.

Foreign shipbuilders offering such ships include DCNS of France, Germany’s ThyssenKrupp Marine Systems, Fincantieri of Italy, South Korea’s Hanjin Heavy Industries & Constructions Co and Navantia of Spain.India has sought a vessel of 213 metre, endurance at sea for 45 days, the vessel must be able to house combat vehicles (including main battle tanks, infantry combat vehicles and heavy trucks on one or more vehicle deck), and the vessel should be able to undertake all-weather operations involving heavy lift helicopters of up to 35 tonne.

Kalyani Group to set up defence manufacturing unit in Gujarat

The Kalyani Group will invest Rs  600 crore in a defence manufacturing facility at Dholera in Gujarat. Likely to employ about 2,500 people, it will include the capacity to upgrade and overhaul  armoured vehicles, with a plan to also make defence electronics and radar.

According to a memorandum of understanding signed with the state government on Sunday at the Vibrant Gujarat Summit, the operations are likely to commence by 2016. Amit B Kalyani, executive director, Kalyani Group, said the setting up of the plant would be in line with Prime Minister Narendra Modi’s ‘Make in India’ vision.

“We are confident that given an opportunity, we can become the manufacturing hub for the world,” he said. Kalyani Group has already formed a ‘Make In India’ project team, with senior executives to work on an import substitution strategy. It is targeting $30-40 billion worth of iron and steel products that are currently imported for the defence, energy, automotive, construction and mining equipment industries.  The group is undertaking its defence business through a subsidiary, Kalyani Strategic Systems.

The land at Dholera has been offered by the state government for putting up the plant. Kalyani Group’s annual turnover is Rs  12,000 crore and the plan is to increase thes business three to four times over the next 10 years, by embracing Make in India.

Beside the forging and engineering business of its flagship company, Bharat Forge, it is focusing on the non-automotive segments of the power, railway, aerospace, oil and gas, and defence industries. A large part of this will be on defence and aerospace.