Six of seven defence firms carved out of OFB report profits within six months of operations

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Six of the seven new defence companies, which were carved out of the Ordnance Factory Board and were dedicated to the nation on the occasion of Vijayadashmi on 15 October 2021, have reported provisional profits during the initial six months of their business (1 October 2021- 31 March 2022).

The seven companies are Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), India Optel Limited (IOL), Yantra India Limited (YIL) and Gliders India Limited (GIL).

According to the Defence Ministry, barring YIL, all six other companies have reported provisional profits.

As per the ministry data, in the first six months, MIL reported a profit of Rs 28 crore,  AVNL reported Rs 33.09 crore profit. Other companies that reported profit include IOL (Rs 60.44 crore), AWEIL (Rs 4.84 crore), GIL (Rs 1.32 crore) and TCL (Rs 26 crore).

In total, the six firms reported a profit of Rs 153.64 crore in the aforementioned period.

YIL was the only firm that reported a loss of Rs 111.49 crore.

The ministry said that following the dedication of these firms to the Nation, the government has taken various steps to initially handhold and support these new defence companies in starting their business as corporate entities.

“Outstanding indents with erstwhile OFB were grandfathered and converted into deemed contracts valuing about Rs 70,776 crore. Against the targets for Financial Year 2021-22, Rs 7,765 crore were credited to the new defence companies as 60 per cent mobilisation advance before the commencement of business date,” the ministry said.

“An amount of Rs 2,765.95 crore has been released to the seven new companies during the current financial year for capital expenditure and equity,” it added.

Within the first six months, these new companies have achieved the turnover of more than Rs 8,400 crore, which is significant considering the Value of Issue of erstwhile OFB during the previous financial years, according to the ministry.

“From the day one itself, these companies have started exploring new markets and expanding their business, including exports. Within a short time since their inception, these companies have been able to secure domestic contracts and export orders valuing more than Rs 3,000 crore and Rs 600 crore respectively,” it said.

“The MIL has bagged one of the biggest ever export order of ammunition of Rs 500 crore. These companies are also taking measures for developing new products through in-house as well as collaborative efforts,” the ministry said.  The YIL has bagged orders of about Rs 251 crore from Indian Railways for axles, it added

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