Reliance Dassault JV Targets US$4.5 Billion Business From Rafale Deal

Reliance's joint venture with Dassault Aviation  is targeting businesses worth Rs 30,000 crore (US$4.5 billion) as part of the offsets for the contract.

Last year, French major Dassault and Reliance Aerospace had announced the formation of Dassault Reliance Aerospace.  

The company’s plan is to set up a facility spread over 100 acres in Nagpur, with the Joint Venture looking at creating a complete supply chain for the Rafale fighter jet in India, The Economic Times reported today.

The company is also eyeing at defense as the next growth area. It will be eyeing on opportunities under Army and Air Force under the 15 subsidiaries and 3 joint ventures with foreign OEMs and explore the Navy orders under the newly acquired Defence Research and Engineering Ltd (previously Pipavav Defence).

Overall the medium to long term domestic defence opportunity is marked at Rs 15.4 tn. Having spent the previous two years in building capabilities and technology tie-up, the management believes the tender to ordering cycle will commence in FY18 onwards.

Current order book is at Rs 57 billion to be executed by FY21. They are also considering building another shipyard in the east coast at "Rambilli" in Andhra Pradesh.

The company has built up a huge aerospace complex having own airport and airspace for fighter aircraft testing near Nagpur, at Mihan.

Even though the defence opportunity and the plans of the company is big,  the major challenge is the execution, margins and the order booking which is filled with delays.

This offset will be availed by all partners, component manufacturers SMEs, MSMEs who would be working towards completing the Dassault order that will be delivered by the Reliance JV.