Reliance Infrastructure on Monday said it has taken over the management and control of Pipavav Defence and Offshore Engineering with a 36.5-percent holding and that its chairman Anil Ambani will also be the chairman of the acquired company.
The acquired company will be renamed Reliance Defence and Engineering, the company said.
"This is the largest acquisition in the defence sector in India and Pipavav Defence and Offshore Engineering is uniquely placed to tap growth opportunities in the defence industry under Prime Minister Shri Narendra Modi's 'Make In India Programme'," the company said in a statement.
Pipavav said in a filing with stock exchanges that previous promoters Nikhil Gandhi and Bhavesh Gandhi have resigned as chairman and chief executive, respectively. Vice Admiral (Retired) H.S. Malhi has been appointed whole-time director and chief executive.
This apart, the board has also decided to issue up to Rs.1,500 crore to qualified institutional buyers, subject to approval from shareholders.
The Reliance Group is betting big in the defence space as India has the world's third largest army, the fourth largest air force and the seventh largest navy, besides figuring among the top 10 in defence purchasers. In 2013-14, the country spent $50 billion for military needs.
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"The expected naval capital outlay in ship-building for next 10 years is Rs.225,000 crore and a conservative share of private sector at 50 percent amounts to Rs.1,12,500 crore," said Reliance Infrastructure in its statement.
Pipavav Defence and Offshore Engineering is participating in various programmes in the field of new ship-building and maintenance, repair and overhaul (MRO), towards which the government is expected to act soon. The group expects these projects to be worth over Rs.180,000 crore.