Adani Group Ramps Up Defence Sector Presence with Back-to-Back Aerospace Partnerships
In a significant move to bolster its footprint in India's burgeoning defence industry, the Adani Group has announced its second major international aerospace partnership within a span of just two weeks. This aggressive push underscores the conglomerate's strategic focus on expanding its defence revenues over the coming five fiscal years, as articulated by top executives.
Strategic Collaborations with Global Aerospace Giants
A step-down subsidiary of Adani Enterprises Ltd, the flagship entity of the group, has formalized a landmark agreement with Italian helicopter manufacturer Leonardo. This partnership is centered on the manufacturing, maintenance, and repair of military helicopters within India. This development follows closely on the heels of another pivotal collaboration with Brazil's Embraer, aimed at aircraft production, marking a fortnight of intense activity in Adani's defence portfolio.
Adani Aerospace and Defence, operating as a wholly owned subsidiary of Adani Defence Systems and Technologies Ltd, sealed the deal with Leonardo on Tuesday. Adani Defence Systems and Technologies itself is a fully owned subsidiary of Adani Enterprises, highlighting the integrated structure of the group's defence ambitions.
Executive Insights on Localization and Revenue Goals
In an exclusive interview, Ashish Rajvanshi, President and Chief Executive of Adani Aerospace and Defence, emphasized that these partnerships are a clear reflection of the conglomerate's drive to enhance revenue streams from defence ventures. "We are scaling up our current operations in alignment with the local sourcing mandates set by the Indian Army and Navy. Each contract entails specific component localization requirements, and we are committed to fulfilling them meticulously," Rajvanshi stated.
He further elaborated on the timeline for localization, noting that the process for military helicopters will be gradual. The group aims to commence deliveries of the first India-made versions of Leonardo's products to the defence forces before the year 2030, signaling a long-term commitment to indigenous manufacturing.
Financial Performance and Capital Strategy
According to filings for the fiscal year 2025, Adani Aerospace and Defence did not generate any operating revenue, while its holding company, Adani Defence Systems and Technologies, reported consolidated operating revenue of ₹2,007 crore. Despite the capital-intensive nature of the aerospace sector, Rajvanshi clarified that there are no immediate plans for fundraising. "We are currently finalizing the financial terms of the Leonardo agreement, with details expected to be disclosed in approximately two weeks," he added.
Expanding Defence Portfolio and Competitive Landscape
The group's defence initiatives extend beyond aerospace. Adani is actively involved in emergency procurement contracts from the Indian government, with applications submitted for both EP-4 and EP-6 projects, which are in advanced stages of ramp-up. Jeet Adani, Director of Adani Aerospace and Defence, indicated that the focus for now is on scaling existing joint ventures, with no new partnerships anticipated until the next fiscal year.
In a strategic acquisition between December 2018 and April 2020, Adani Defence Systems acquired Alpha Design Technologies to enhance its capabilities in space defence. Alpha Design, specializing in space surveillance technologies, reported revenue of ₹1,039 crore in FY25, driven by government contracts for earth observation and surveillance satellites. Rajvanshi highlighted that the approach is not merely about ramping up surveillance satellites but offering comprehensive spatial intelligence solutions, including data analytics and intelligence-based outputs for defence agencies.
Policy Support and Industry Context
Adani's defence push aligns with broader trends in India's corporate sector, where major conglomerates are intensifying their defence operations. For instance, Larsen & Toubro Ltd's defence division is targeting annual revenue of $1 billion, while Tata Advanced Systems reported ₹5,176 crore in revenue in FY25, outpacing Adani Defence Systems.
The Indian government's policy framework provides substantial support, as evidenced by the FY27 budget, which allocated a record ₹7.86 trillion for defence, including ₹2.19 trillion for capital expenditure. Defence Secretary Rajesh Kumar Singh, speaking at the Adani-Leonardo deal signing, noted that 75% of this capital expenditure is reserved exclusively for India's indigenous private sector. He emphasized the opportunities for large companies and MSMEs to engage in private defence contracts while acknowledging the coexistence of imports and indigenization based on industry needs.
This dual partnership strategy positions the Adani Group to leverage government incentives and contribute to India's self-reliance in defence manufacturing, marking a pivotal phase in its corporate evolution.
