"Our emphasis is to partner with the most credible player in the world. As such, ST Kinetics is an established player with a very good track record of supplying defence equipment to over 30 countries in the world," a Punj Lloyd official said declining to be identified.
India, which spent Rs 10,020 crore to import defence equipment in financial year 2007, is strengthening its defence forces to ward off possible threats from neighbouring countries. The world's most popolous country's imports of military equipment is expected to increase 12-fold to $30 billion by 2012, according to the Associated Chambers of Commerce & Industry (Assocham). The nation is among the top growth markets for Lockheed and other defence equipment makers.
Punj Lloyd will be bidding for the 155 mm howitzer and the 350 mm howitzer for supply to the Indian army in partnership with ST Kinetic. Moreover, in future the company is considering to expand the scope of collaboration with ST Kinetics. Gurgaon-based Punj may also partner other leading equipment makers and suppliers to bid for Indian defence orders, the official said.
The company has not made any revenue projections as this is the first step in its foray into the Indian defence sector. However, company officials say that with 7 per cent of India's GDP earmarked annually for defence expenditure, Punj Lloyd views this sector as a serious growth opportunity area. ST Kinetics is one of Asia's leading land systems and speciality vehicle companies with a strong portfolio of products and services for the defence sector and commercial markets.
Its capabilities include design and development, systems integration and management of a wide range of specialised equipment.
The shares in Punj Lloyd closed the day on a flat note at Rs 278.75 on the Bombay Stock Exchange, up by Rs 0.75, or 0.27 per cent.
