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Rajvanshi says: “Over the next 10 years, defence will be a $250-$300 billion opportunity. There are less than four tier 1 players in the market. Tata, Bharat Forge, Adani, L&T, and then there is a long tail of 800 MSMEs. It is very important that we have a whole-of-nation approach, where all these players are coming together and focusing on building the nation.”
Let me start by understanding the thought behind Adani’s foray into the defence space. When you were on the drawing board, what exactly did you want to do? It is early in the overall scheme of things for Adanis, but where is it coming from?
Jeet Adani: We have always believed that to have any successful business and we have created ourselves in that manner is that we wanted to align ourselves with the interest of the nation. We saw that with our strengths in terms of executing projects and creating large scale infrastructure that this was an area where we could serve a strategic interest for the nation as well as create something that can be extremely competitive from a business perspective. The areas that we have identified are where we thought that we will have a competitive advantage and it is something that is unsolved today.
Over what period of time do you see defence as a proportion become quite meaningful in your overall business? What is the commitment level from the board?
Jeet Adani: From the family perspective, the commitment level for this business is extremely high. Defence business is something which often has a hockey stick trajectory. So, you might not notice it, but suddenly it can become very sizable and meaningful in a very short period of time so that is something to always watch out for.
I feel that we are at an inflection point where for the past six-seven years, we have been working on a lot of different programmes, a lot of different platforms. I feel now we are at a stage where we have something meaningful across the platform that we can offer.
Right now, is the defence business a private company?
Jeet Adani: No, it is under Adani Enterprise.
How are the numbers stacked up in favour of this business for the Adani Group?
Ashish Rajvanshi: See, we need to understand what is the long-term potential. As Jeet mentioned, we never take short-term calls. When it has been declared by the Honourable Prime Minister that by 2047, we want India to be self-reliant in energy and security, it clearly paves the way in terms of opportunity.
Today, India is spending $75 billion annually on defence, of which $25 billion is going into new growth capex. Yes you are talking about the next 10 years, it will be an $250 billion to $300 billion opportunity, just in terms of the size of the opportunity. There are less than four tier 1 players in the market. Tata, Bharat Forge, Adani, L&T, for example and then there is a long tail of 800 MSMEs. So it is very important that we have a whole-of-nation approach, where all these players are coming together, rather than talking about numbers and focusing on building the nation.
Sure, I understand. But what categories would you be looking at in a phased manner? Also, what is the potential there? Some revenue number internally you would have put in mind for 5 years or 10 years?
Ashish Rajvanshi: In terms of which areas we are focusing on, it is very clear. Based on 3,000 kilometres of land and naval border, ISR becomes the primary important area. And ISR stands for Intelligence, Surveillance, Reconnaissance. How do I complement the foot soldier by giving him technology? It is by giving the technology in unmanned, aerial systems, unmanned ground systems, unmanned naval systems. How do we function and work along with DRDO on the early warning systems and also bringing technology from a perspective of cyber. So these are areas around ISR which are important to us.
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