Bharat Forge Subsidiary Receives Defense License for Jejuri Unit

Bharat Forge announced that its wholly-owned subsidiary, Kalyani Strategic Systems Ltd. (KSSL), has secured a defense manufacturing license for its Jejuri unit in Maharashtra. The license, granted by the Department for Promotion of Industry & Internal Trade (DPIIT) under The Industries (Development and Regulation) Act, 1951, allows KSSL to produce a variety of defense products specifically designed for military use. This license enables KSSL to engage in defense projects going ahead, subject to compliance with specified terms and conditions.

KSSL’s Expanding Capacity

KSSL’s new license positions the company to boost its participation in defense initiatives. Already collaborating with international partners, KSSL has secured export orders worth $155.5 million. In August 2023, the subsidiary made headlines by exporting India’s first indigenously designed, developed, and manufactured artillery system. It has also received multiple ammunition shell orders, ensuring full capacity utilization for the next 2-3 years.

Growth in Defense Sector

Bharat Forge has focused on its defense vertical, which has strengthened its order book and revenue. In FY24, the company secured approximately Rs.4,500 crore in defense orders out of a total of Rs.6,300 crore, resulting in a four-fold increase in defense revenue to Rs.1,561 crore. Notably, over 90% of this revenue was from exports. Additionally,  Bharat Forge is set to manufacture over 250 guns and 1,000 vehicles annually, with the potential to exceed this capacity as demand rises.

Atmanirbhar Bharat & Defense Production

India’s defense production reached Rs.74,739 crore in FY24, with private companies contributing 22% (Rs.16,411 crore). Defense exports increased by 32.5%, amounting to Rs.21,083 crore. The Defense Ministry aims to triple production to Rs.3 lakh crore and double exports to Rs.50,000 crore by FY29, aligning with the Atmanirbhar Bharat initiative.

Conclusion: In conclusion, with the new defense manufacturing license, Bharat Forge’s subsidiary, KSSL, seems  well-positioned to contribute to India’s defense sector and bag orders going ahead. The company’s order book and expanding capacity brings out its role in upgrading India’s defense manufacturing targets.

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