Center sets up 7 companies to corporatize ordnance factories

The move marks the implementation of a major overhaul of 41 factories set up under the four-decade old Ordnance Factory Board with an aim to improve accountability and efficiency of defense production units. A corporate structure also brings more transparency to these entities.

Of the seven companies formed by the reorganization of the Ordnance Factory Board, two companies – Troop Comforts Ltd and Gliders India – are into clothing manufacturing. Munitions India Ltd., India Optel Ltd., Armored Vehicles Nigam Ltd., Advanced Weapons and Equipment India Ltd., and Yantra India Ltd. are into manufacturing machinery and equipment, data from the Registrar of Companies (ROC) showed.

The paid-up capital of these companies is ₹1 lakh each, but their authorized capital, or the maximum authorized share capital at the time of incorporation, ranges from ₹200 crore in case of Gliders India ₹The data shows that in the case of Advance Weapons and Equipment India Ltd., Rs 15,000 crore. Advanced Weapons and Equipment India Limited will be located at the Ordnance Factory in Kanpur. These companies have their registered offices in Uttar Pradesh, Maharashtra, Uttarakhand and Tamil Nadu.

A corporate structure allows companies to publicly raise capital if the government decides to do so. India also allows 74-100% foreign ownership of defense production companies under various categories.

Emails sent to the Department of Defense Production and the Ordnance Factory Board on Monday remained unanswered at the time of publication.

The move to corporatise the board was approved by the Union Cabinet in June with a view to make India self-reliant in defense hardware manufacturing. It brings together various factories under one company, which is expected to help in efficient management of cost and supply chain in areas such as production of ammunition and explosives, vehicles, weapons and equipment, military comfort items and parachutes. Is.

Building domestic capacity in defense production and access to advanced technology in this area is a key priority of the Narendra Modi administration.

India spent ₹3.43 trillion on defense in FY2011, excluding pensions, exceeded ₹20,769 crore was allocated at the beginning of the year due to large capital acquisition and purchase requirements, according to budget documents for FY12. India’s Defense Ministry budget for the fiscal year 2012, including pensions ₹4.78 trillion.

The effort to reform the organization structure of defense production units comes in the backdrop of tensions and confrontations that erupted along India’s high-altitude border with China last year.