Global consultant to advise BEL on diversification

Bharat Electronics Ltd (BEL), the public sector defence undertaking is planning to grow inorganically this year. The company is presently in the process of appointing a global consultant to draw a detailed roadmap for its diversification-cum-acquisition strategy.

The company is actively scouting for companies with expertise in new technology areas in both defence and civilian product segments.

Said V V R Sastry, Chairman and Managing Director, BEL, "We will be hiring a global consultant very soon to give us a detailed roadmap for our diversification as well as an acquisition strategy. We wish to get a blueprint ready in the next two quarters."

He said BEL has identified four to five companies with expertise in high technology areas for a possible acquisition. BEL is planning to diversify into areas like medical electronics, automotive, homeland security and other related areas as part of its strategy to reduce dependency on defence orders.

Sastry said the company is likely to form a joint venture with an Israeli company, Rafael, during the present fiscal year. Last year, it signed a term sheet (letter of intent) with the company to work on new areas jointly, such as missile electronics and guidance technologies. Last year, Bharat Electronics spent Rs 167.44 crore towards research and development activities. It has also invested in DRDO projects for the first time.

The company has earmarked Rs 200 crore towards capital expenditure during the year 2008-09 to fund the ongoing projects. "As far as acquisition is concerned we have not made any provision at this stage, as we don't have any fund constraints for making an acquisition," he said.