The seven new Defence PSUs have projected cumulative sales target of approximately ₹17,000 crore for the financial year 2022-23, which is significantly higher as compared to previous achievements of erstwhile Ordinance Factory Board (OFB), said the Defence Ministry.

The bouncy in expectations emerged during a performance review Defence Minister Rajnath Singh took on DPSUs first anniversary. The seven DPSUs— 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), Yantra India Limited (YIL), and Gliders India Limited (GIL) — were carved out of the OFBs.

The minister was briefed on the DPSUs by the department of defence production.

Improvement in productivity

Post corporatisation, the Ministry stated that the new entities have shown marked improvement in productivity and quality in the changed corporate set up. In the financial year 2021-22, out of seven companies, six have indicated profits based on the provisional financial statements. Within a short span of six months — between October 01, 2021 to March 31, 2022 — these new companies have achieved the turnover of more than ₹8,400 crore, which is significant considering the Value of Issue of erstwhile OFB during the previous financial years. For the financial year 2022-23 also, the seven new DPSUs have projected cumulative sales target of approx. ₹17,000 crore, which is significantly higher as compared to previous achievements of erstwhile OFB, the Ministry stated in an official statement.

The new defence PSUs also reported production achievement of more than ₹6,500 crore in first six months of this year, which is higher if compared with the production achievement of approximately ₹5,028 crore for the period April 01, 2021 to September 30, 2021, informed the Ministry.

Modernisation

An amount of ₹2,953 crore has been released to these companies in the form of equity, during the financial years of 2021-22 and 2022-23 for modernisation and further an amount of ₹6,270 crore is planned to be released to these companies up to 2026-27 for capital expenditure. In addition, an amount of ₹3,750 crore has been released to these companies in form of Emergency Authorisation Fund, stated the Ministry.

Later in his virtual address to the DPSUs, Minister Rajnath Singh urged them to develop and adopt latest technologies to make India a global defence manufacturing hub and achieve ₹35,000 crore defence exports target by 2025.

Market share

While lauding them for recording profits, the Minister stressed on the need to increase India’s market share across the globe, describing it as the responsibility of the companies to contribute in the efforts towards achieving the objective. India has now managed to bag a couple export contracts. After signing a $375 billion deal to ship the BrahMos supersonic cruise missile to Phillipines, India is believed to have secured another $250 million contract to export indigenously developed multi-barrel Pinaka launchers, anti-tank rockets among other arms and ammunition to Armenia, which is currently engaged in a battle with its neighbour Azerbaijan.

Though the Government has infused capital into the DPSUs, the Minister was of the view that they should be able to raise money from the market in the times to come.

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