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Old 7th November 2015, 15:26   #1
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Default Tata's losses in India might impact its Defence business

Source & Full Business Standard Article

Tata Motors' domestic operations generated a turnover of only Rs 38,176 crore and a net loss of Rs 4,739 crore.

On October 27, in a thunderbolt to Tata Motors, the defence ministry issued a note to the 10 FICV contenders, clarifying that domestic operation alone would count whilst evaluating a company's commercial eligibility and strength - a key determinant for who will win the FICV project.

While this is certainly a setback for Tata Motors, it might even be an outright disaster that makes the company ineligible to participate. The Defence Procurement Policy of 2008 (DPP-2008), which governs the FICV project, specifies eligibility criteria for Indian private companies: they must be registered for minimum 10 years; have capital assets in India of at least Rs 100 crore and a turnover greater than Rs 1,000 crore for each of the preceding three years; and a minimum credit rating equivalent to a CRISIL/ICRA 'A'. Another criterion demands "consistent profitable financial record showing profits in at least three years of the last five years and with no accumulated losses". Tata Motors' loss of Rs 4,739 crore loss last year was greater than the profits of the four preceding years.
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Old 7th November 2015, 22:08   #2
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Default Re: Tata's losses in India might impact its Defence business

If all the TATA group companies can be considered as one, they will surely be in.
Btb, who are the other contenders for the project.
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Old 7th November 2015, 22:48   #3
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Sorry for the long post:

Defence Ministry to Shortlist Two Vendors for $10 billion Futuristic Combat Vehicle for the Army

Following the mega deal for 126 combat fighters (MMRCA) for the Indian Air Force, it is the Indian Army's turn now to get combat vehicles to the tune of $ 10 billion for which local players such as Larsen & Toubro, Mahindra & Mahindra, Tata Motors and Ashok Leyland are vying. The Defence Ministry will be earmarking the vendors for the contract for the Futuristic Infantry Combat Vehicle (FICV) this month.

According to the Defence Ministry, the vendors for Indian Army's FICV project will be shortlisted on the basis of technical and commercial aspects of the "Buy & Make" category wherein only local Indian firms can bid. However, local firms can opt for technology tie-ups with foreign companies. It has been learnt that Ashok Leyland and Larsen & Toubro have bid as a team while state-run Ordnance Factory Board (OFB) is also making a bid. The bidders are awaiting the final shortlist from the Defence Ministry. The chosen vendor will be expected to build 70 per cent of the vehicle.

The prestigious multi-billion dollar FICV contract is part of India's efforts to modernize its defense forces which is still heavily relying on Soviet-era equipment. The Indian Army would require 2,610 FICVs to replace the existing Soviet-vintage 'Sarath' BMP-II combat vehicles built by OFB and in-service for over three decades. The locals firms have already given their proposals last year on how to develop FICVs, the estimated capital expenditure, the technology requirement and the minimum order to make it a viable proposition. The Defence Ministry is evaluating these submissions and even visiting facilities of the vendors to assess their capabilities and projections.

The FICVs will be built in an integrated manner involving the Army, the defence ministry and the local industry in aspects of research, design, development and production of systems.

The FICV will be made for inland warfare and is expected to be half-tracked and half-wheeled. The FICV project will be a two-part contract – the first being the development of the FICV and then the production of about 2,600 such armored vehicles designed to transport troops in hostile terrain.

With the intention of having two production lines for the FICV, the Defence Ministry had indicated earlier that the winner will be given 65-70 per cent of the order and the runner-up will build 30-35 per cent of the army's requirement of FICVs, provided that the company agrees to build the winning design at the same cost as the winner.
Source: http://www.defencenow.com/news/238/d...-the-army.html

Originally Posted by rajeev k View Post
Btb, who are the other contenders for the project.
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Old 9th November 2015, 21:34   #4
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Default Re: Tata's losses in India might impact its Defence business

This is nothing but the import lobby at work. Try and scuttle anything indigenous and then leave no option but overpriced imports.
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Old 9th November 2015, 22:18   #5
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Default Re: Tata's losses in India might impact its Defence business

Originally Posted by rajeev k View Post
If all the TATA group companies can be considered as one, they will surely be in.
Btb, who are the other contenders for the project.
True but then, TATA Sons Limited is the holding company of TATA group and is not a public listed company. So I guess it will still not be eligible for the bid. I'm not sure I might be wrong, people with more knowledge on the subject can enlighten us.
TATA Motors will rue its current position that it had got itself into since this is a HUGE opportunity at stake.
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