Tata Power starts work at Defence Manufacturing facility

Tata Power started work to set up its Rs 450 crore defence manufacturing facility on September 8, 2015. The greenfield defence production facility of the company's Strategic Engineering Division (Tata Power SED) is at Vemagal in district Kolar, Karnataka. The share price of the company on BSE increased by 1.96 per cent on early trades and is currently trading at Rs 59.15.

The division is set up with at a new 50 acre Vemagal facility to create a state of the art integrated digital design to manufacture large systems engineering and integration during the next one year. The facility is the largest strategic electronics manufacturing unit approved under the Modified Special Incentive Package Scheme (M-SIPS) program of Department of Electronics & Information Technology (DeitY), Government of India. The Karnataka government also approached for additional land adjacent to the present site at Vemagal under the state's new industrial policy.

The facility will have ferrous or non-ferrous structure manufacturing, precision engineering and machining capabilities, system/ shelter integration bays and specialised manufacturing/ test facilities for electronic warfare systems, inertial navigation systems and RF Systems among others. It will additionally provide provision to optronics and night vision equipment including tube and detectors manufacturing.

This integrated systems engineering facility will be able to deliver artillery and air defence weapon systems, network centric systems such as tactical Communication/ battlefield management systems, integrated electronic warfare systems and radar/ sensor Suites catering to the land, naval and airborne warfare requirements of the Indian Armed Forces. The facility will also be able to deliver systems for homeland security and is geared to produce clean energy solutions for defence as well as civilian use.

The Vemagal investment is in line with the Company's commitment towards the 'Make in India' initiative and the facility will be dedicated to the national effort of 'Swavalamban' in the strategic defence sector.Israeli defence companies such as IAI, Elbit and Rafael have said they are keen to manufacture UAVs, missiles, radars and other defence equipment through joint ventures (JVs) with Indian private companies under Make In India campaign.

Under M-SIPS, government provides subsidy for investments in capital expenditure with a limit of 20 per cent for investments in Special Economic Zone (SEZ) and 25 per cent in non-SEZs. The M-SIPS investment applications approval status witnessed to 9 approvals amounting to Rs 3027.42 crore in Q1FY16 from 4 approvals amounting to Rs 383.21 crore in Q1FY15.

Tata Power has presence in various segments of the power sector, which includes fuel security and logistics, generation (thermal, hydro, solar and wind), transmission, and distribution and trading. The Company is also engaged in offering defense electronics, engineering, project contracts/infrastructure management services, coal bed methane and property development. It has operations in Indonesia, Singapore, South Africa and Australia. Tata Power SED has a dedicated R&D set up at Mumbai and a 10.5 acres Defence Manufacturing facility at Electronics City, Bengaluru, operational since 1986.