NEW DELHI: After entering the country’s crowded automobile space late last year by acquiring a stake in MG Motor India, Sajjan Jindal-led JSW Group is foraying into the defence sector with the establishment of a new business vertical, JSW Defence and Aerospace (JSW Defence).
JSW Defence on Thursday marked its entry by acquiring a majority stake in an extreme off-road vehicle company, Gecko Motors, now renamed as JSW Gecko Motors. Parth Jindal, scion of JSW Group, said, “At $73.8 billion, India as a country has a large defence budget. By 2030, Indian defence budget is likely to grow to $200 billion. Capital outlay forms a very large part of the defence budget and it is here, we at JSW see a big opportunity.”
In the last 4-5 years, the $23 billion conglomerate, which has primary interests in the steel and energy business, has been diversifying itself into various verticals either by acquisitions or setting up new units. In 2019, JSW entered into the paint business and last year listed JSW Infrastructure, its port business, on the bourses and announced ambitious plans for the auto sector, particularly in the small but fast-growing electric vehicle space.
The group has up a venture capital unit to invest in emerging businesses and has been flirting with the idea of listing its cement unit for quite some time now. “JSW is foraying into capex-heavy industries. A lot will depend on the group’s ability to raise affording funding as they are yet to start manufacturing cars or produce defence equipment in large quantity,” said a senior analyst at a leading brokerage firm.
JSW Group is investing Rs 40,000 crore in electric vehicle (EV) manufacturing projects in Odisha. It has plans to expand exponentially its cargo handling, cement and steel manufacturing capacity. In the defence space, it said they aim to serve domestic as well as international markets.
“The Group faces competition in all its businesses. You have names ranging from Adani and Tata to Birla and Asian Paints. Not to forget that these verticals are sensitive to the economic slowdown, fall in consumption and currency fluctuations,” the analyst added. JSW Gecko Motors is promoted by its founders led by Jaskirat Singh Nagra has secured an order worth Rs 250 crore from Ministry of Defence (Army) for manufacture and supply of 96 specialist mobility vehicles (SMVs), branded as ATOR N1200.