Rolta, Thales JV to kick off operations in July

The 51:49 joint venture (JV) between Rolta India and $20-billion France-based Thales will start operations in July. The JV targets at least 20-25 per cent of the defence market's IT solution requirements in India.

The ministry of defence (MoD) has an annual budget in excess of $20-25 billion (Rs 82,000-102,500 crore), of which more than 30 per cent is spent on capital equipment.

Hiranya Ashar, director-finance and chief financial officer, Rolta India, said the joint venture (JV) would cater to the $1 billion (Rs 4,100 crore) domestic market in the next 3-5 years.

"Even if the JV is successful in tapping 20-25 per cent of the market, it is reasonably a big share," he added. The Indian defence spending has been growing by around 15-18 per cent, but its IT spend rate is much higher.

Rolta India is a provider and developer of geospatial information system (GIS) solutions, engineering design automation (EDA) solutions and e-security services, while Thales complements Rolta with its expertise in electronics.

The JV will focus on the Indian defence market with its offering of C4ISTAR technology (command, control, computers and communications systems, intelligence, surveillance, target, acquisition and reconnaissance) in India.

Ashar said, "The MoD for a long time has been looking for such technology. The only problem was that they wanted it with the transfer of technology. Thales has agreed to transfer the technology to India."

Rolta also plans to tap the offshore business opportunity with Thales. The French company focuses on defence, aerospace and security markets worldwide, and will provide services which can be offshored to the JV.

"According to the regulations, if Thales is selling anything to the defence sector, 30 per cent of this needs to be offset by means of exports from India. I am quite sure that this can be taken care by the JV," says Ashar.

Apart from the GIS solutions, the company has offering in the design engineering space and e-security. Its confirmed order book currently stands at Rs 800 crore, executable over the next 1.5-2 years. Its nearline projects pipeline is close to Rs 1,500 crore.

In the e-security segment, Rolta India works with Computer Associates (CA), but is also looking to tie up with other companies that can provide similar solutions in the enterprise segment.