Krishna Defence and Allied Industries Limited advances its July 2024 MoU by signing a JV agreement with VABO Composites B.V., Netherlands. The domestic entity, with 51:49 ownership favouring Krishna, will manufacture advanced composite ship doors and hatches for defence and maritime sectors. This strategic move blends Dutch tech with Indian infrastructure to target India and ASEAN markets, boosting 'Make in India' naval self-reliance
Krishna Defence and Allied Industries Limited has formalized its joint venture agreement with VABO Composites B.V., Netherlands, progressing from their July 2024 MoU. The domestic JV, with 51:49 shareholding favouring Krishna Defence, targets manufacturing advanced composite solutions for defence and maritime sectors, enhancing India's self-reliance in naval components.
JV Structure Details
The JV company, yet to be incorporated, starts with Rs 1 lakh paid-up capital (10,000 equity shares of Rs 10 each). Krishna Defence holds majority control at 51 per cent, nominating one director to a two-member board alongside Vabo's nominee. No share issuance or loans involved; it's at arm's length, though the JV becomes a related party subsidiary post-incorporation.
Key Highlights
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51:49 ownership split empowers Krishna Defence's strategic oversight.
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Focus on composite ship doors, hatches with Vabo's tech and company's infrastructure.
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Targets India and ASEAN expansion amid rising naval demand.
Strategic Benefits
This ties into 'Make in India' by blending Vabo's cutting-edge composites expertise with Krishna Defence's market presence, aiming for lightweight, durable naval products. It bolsters product diversification beyond traditional defence, eyeing exports to Southeast Asia. Trials for composite doors near completion, with FY26 facility setup planned.
Stock Impact
Shares traded around Rs 900 recently, reflecting positive momentum.
Sources: NSE India Disclosures, Krishna Defence Website, ScanX Trade.