Business

Reliance Infra buys Pipavav Defence in all-cash deal

RInfra will first invest Rs 819 cr to pick up 17.66% stake in the company at a price of Rs 63 from the promoters

Pipavav Defence

Anil Ambani’s Reliance Defence Systems along with Reliance Infrastructure is all set to make a big bang entry into the defence business by acquiring up to 25% stake in

Reliance Infrastructure will first invest Rs 819 crore to pick up 17.66% stake in the company at a price of Rs 63 from the promoters and then launch an open offer at the price of Rs 66 a share.

The Anil Ambani group has pipped a number of suitors including the Munjals of the Hero group and M&M to buy the company.

The Ambani company will spend an additional Rs 345 crore to buy an additional 7.44% stake in the company, if there is no response in the open offer.  

Post transaction, the Gandhi family will own 24.6% stake in the company. The promoters own 44.5% stake in the company.  

Pipavav Defence stock closed at Rs 76.50 on Wednesday. 

With the acquisition, Reliance Infrastructure joins a growing list of Indian companies which are getting into the defence sector with the Modi Government planning to give more orders to the Indian companies under the Make-in-India policy. The Modi government has also allowed 49% foreign direct investment in defence companies. 

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