Six of the seven new defence companies report provisional profits during first six months of their business

Six of the seven new defence companies, which were dedicated to the nation on the occasion of Vijayadashmi on October 15, 2021, have reported provisional profits for the first six months of their operations, which ran from October 1, 2021 to March 31, 2022. All other companies, with the exception of Yantra India Limited (YIL), have reported provisional profits: Munitions India Limited (MIL); Armoured Vehicles Nigam Limited (AVANI); Advanced Weapons and Equipment India Limited (AWE India); Troop Comforts Limited (TCL); India Optel Limited (IOL); and Gliders India Limited (GIL).

Following their commitment to the nation, the government has taken a number of initiatives to assist and support these new defence firms as they establish themselves as corporate organisations. Outstanding indents with the former OFB have been grandfathered and converted into presumed contracts worth Rs. 70,776 crore (US$ 9.24 billion). In order to meet the targets for FY22, Rs. 7,765 crore (US$ 1 billion) was credited to new defence businesses as a 60% mobilisation advance before the start of activity. During the current financial year, Rs. 2,765.95 crore (US$ 361.38 million) was issued to the seven new enterprises for capital expenditure and equity.

Within the first six months, these new companies have achieved a turnover of more than Rs. 8,400 crore (US$ 1.09 billion). These companies have been able to acquire domestic contracts and export orders worth more than Rs. 3,000 crore (US$ 391.96 million) and Rs. 600 crore (US$ 78.39 million), respectively, in a short time since their creation. The MIL has received a Rs. 500 crore (US$ 65.32 million) ammunition export order, which is one of the largest ever. The YIL has bagged orders of about Rs. 251 crore (US$ 32.94 million) from the Indian Railways for Axles. These businesses are also taking steps to develop new products, both internally and through collaboration.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.