Tata Advanced Systems Ltd (TAS) picks up 74% stake in HBL Elta Avionics Systems Pvt Ltd

Tata Advanced Systems Ltd, a subsidiary of Indian auto manufacturing giant Tata reported it had acquired a 74 per cent stake in Hyderabad based avionics firm HBL Elta Avionics Systems Pvt Ltd. HBL Elta Avionics Systems Pvt Ltd’s remaining 26 per cent stake remains under its foreign partner ELTA Systems, a unit of Israel Aerospace Industries.  Tata was counseled on this investment by Mape Advisory.

HBL Elta manufactures parts and accessories for defense-related aerospace applications. The Tata subsidiary was established some four years ago and was meant to take advantage of the vast prospects in India’s defense sector.

Tata Advanced Systems provides solutions for defense, homeland security and disaster management through technology development, transfer and research. The investment is expected to enable the group's second JV with Israel Aerospace Industries. It already has a 74:26 partnership to manufacture unmanned aerial vehicles, electronic warfare systems, missiles, radars and homeland security systems.

The Indian government has been modernizing the manufacturing of defense equipment, opening up the area for private players. It, however, has capped foreign direct investment to 26 per cent and debates have been on to raise it to 49 per cent.

Tata Advanced Systems has gone into a number of partnerships geared at expanding its business in the defense space. The firm has struck a few partnerships with foreign companies for technology, among other things. Tata has been present in defense, homeland security and disaster management space for several years but in a small way.

Tata Motors is India's largest automobile company with revenue estimates of US$ 5.5 billion. With over 3 million Tata vehicles plying in India, it is the leader in commercial vehicles and the second largest in passenger cars. It is also the world's fifth largest medium and heavy truck manufacturer and the second largest heavy bus manufacturer.

Tata cars, buses and trucks are already being marketed in several countries in Europe, Africa, the Middle East, South Asia, and South East Asia and in Australia. Tata Motors has been present in Europe over the past 10 years. The company acquired the Daewoo Commercial Vehicle Company, South Korea's second largest truck maker, in 2004.

With over 220,000 employees across 93 operating companies, the Tata Group has operations in more than 40 countries across six continents, and its companies export products and services to 140 nations

24 Nov 2010.