| The
announcement was made March 4 in a statement issued by Mr Rajesh K Dhingra, President
of the recently-formed Reliance Defence & Aerospace. Reliance Defence Systems,
a subsidiary of Reliance Infrastructure, will control the newly-acquired company. Significantly,
at the recent Aero India 2015 in Bangalore, Mr Ambani had indicated his intention
to make helicopters in the country. Also, after attending Aero India (Feb 18-22),
he visited IDEX 2015 (Feb 22-26) in Abu Dhabi for interaction with leading companies
engaged in land and naval systems. He will shortly take over as the Chairman of
the company, replacing entrepreneur Nikhil Gandhi. But the founder promoters,
including Mr Gandhi, will continue to be on the company’s board with minority
stake and two non-executive members. The deal is worth Rs 2082 crores (US$
35 million at current exchange rate).  According
to the statement, Pipavav is looking at potential orders worth Rs 120,000 crores
(US$ 20 billion approx) just in the next five years. Pipavav already has technological
tie-ups with global leaders like Saab (Sweden), DCNS (France), Sembcorp Marine
(Singapore) JSC Zvyozdochka and Rosobronexport Russia.
Under Mr Ambani’s
leadership, infusion of new capital and an arrangement with a leading US shipboard
systems company are likely. Located on India's western seaboard in the Arabian
Sea, in Prime Minister Narendra Modi's home state of Gujarat, Pipavav was set
up by businessman/ entrepreneur Nikhil Gandhi, and the facility began operating
as a port in 1996. Today, the Pipavav port is capable of handling container
as well as bulk and LPG vessels and many shipping lines are currently using its
facilities, which are also expanding. Initially, it had started operations to
cater to the refrigerated cargo market in fish exports. On 7 August 2012,
Pipavav Shipyard Ltd became Pipavav Defence & Offshore Engineering Company
and was the first private shipyard to secure a Rs 2,600 crores ($ 50 million approx.
then) contract from the Indian Navy to construct six OPVs, each with a displacement
of about 2,500 tonnes. But the company needed more work, and had loans to pay.
There were discussions with other business houses also, notably the Mahindras
and Munjals. But Reliance literally pipped them in the Pipavav acquisition. Incidentally,
Pipavav Defence has one of the world's largest Infrastructure facilities - spread
over 841 acres of land on the West Coast of India (Gujarat), Gulf of Cambay, with
210 acres of fully developed waterfront land and 250 acres developed for shipbuilding. It
also has India's largest, and one of the world’s largest dry docks, measuring
662 meters in length and 65 meters in width. The second dry dock measuring 750
meters in length and 60 meters in width is under development. (Some pictures,
taken by India Strategic
just a couple of weeks back, are shown here to illustrate the facility). About
the transaction, Mr. Ambani commented: “This is a unique opportunity for
Reliance Group to participate in Prime Minister Mr. Narendra Modi’s ‘Make
in India’ programme for the high growth defence sector. We are confident
that our strategic investment will create long term value for all stakeholders.” Mr.
Nikhil Gandhi, the founder promoter and Chairman of Pipavav Defence stated: “This
transaction is an endorsement of the vision we set out to achieve almost 10 years
ago. Aside from the commonality of vision, we share a philosophy of long-term
value creation for all stakeholders. I look forward to supporting Reliance to
realize the goal of creating India’s foremost defence company, with an emphasis
on the 'Make in India' programme initiated by the Hon'ble Prime Minister of India.” Mr.
Bhavesh Gandhi, co-promoter and Vice Chairman of Pipavav Defence stated, “I
expect Reliance’s strategic investment to accelerate our progress towards
meeting the needs of our Nation, and creating sustainable social value in the
community we operate in.” About Reliance Infrastructure
Limited Reliance Infrastructure Ltd (Rlnfra) is amongst the largest infrastructure
companies in India, developing projects through various Special Purpose Vehicles
(SPVs) in several high growth sectors within the infrastructure space i.e. Roads,
Metro Rail and Cement. About Pipavav Defence and
Offshore Engineering Company Limited Pipavav Defence is India's first world
class integrated defence production, ship building and offshore infrastructure
company. It has the capabilities to produce a wide range of naval vessels for
Defence, Offshore (E&P) assets, Hydrocarbon Vessels and commercial applications. | 
