Plans to finalise first acquisition in next 9 months

Madhumathi D.S.

Bangalore, June 28 Bharat Electronics Ltd, armed with its new navaratna status, will now actively pursue acquisitions and joint ventures with domestic and foreign partners, according to its CMD, Mr V.V.R. Sastry.

The defence PSU hopes to finalise its first acquisition, in the range of Rs 50-100 crore, “in the next nine months,” Mr Sastry told Business Line.

“We are looking at acquisitions. Our target is good technology companies in related areas (to BEL’s business). These could be small and medium companies abroad who would be willing to adopt joint development,” Mr Sastry told.

Secure communication being a core activity, BEL’s priority would be for the latest technology in radars and sonars electro-optics, electronic warfare, microwave components and systems. It has a good cash reserve and the limitation, he said, would be what technology companies would be willing to share with India.

The company which closed 2006-07 with a turnover of Rs 4,000 crore is also looking at collaborations and co-development and co-manufacturing at its facilities. It already is in three joint ventures — the thriving GE BE P Ltd that makes X-ray tubes; the rather defunct BE Multitone; and the BEL Optronic Devices Ltd in which BEL has 93 per cent stake.

In the last one year, BEL upgraded its Bangalore and Panchkula facilities at Rs 50 crore; the aim was to capture 20-30 per cent of the $10-billion offsets from defence deals with global majors and contract manufacturing in professional areas such as defence and medical electronics.

“The defence offsets will also be our main driver for exports,” to Europe and the US. Mr Sastry said, “We would like to take our exports to 10 per cent of our turnover in three years.” For now, BEL, like many Indian companies, is watching out for the Government’s decisions on acquiring new fighters for the IAF, the helicopter modernisation and tankers.

According to Mr Sastry, “The navaratna status has come at a time when there is lot of challenges: the defence sector is opening up to private and international players. We are expanding and looking at areas outside defence and the traditional ones. Just as a navaratna ring is worn to ward off problems, this status will prepare us to face future challenges. BEL has made national footprint in electronics and we’d like to bring the same into the global arena.”

BEL and fellow defence enterprise Hindustan Aeronautics Ltd will jointly pitch for satellite-related projects that the national space agency ISRO may offer.

The two have also bid for the DRDO’s proposal to develop UAVs (unmanned aerial vehicles) that are used for military reconnaissance.

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