Bengaluru-based defence electronics maker Alpha Design Technologies plans to raise R500 crore to fund its expansion plans in the next one year. The company, which supplies a variety of devices to the armed forces and exports to Israel’s Elbit Systems, is looking to raise funds through a public issue.
“Although many private equity investors and institutions have approached us to invest in our company, we are planning to tap capital markets to raise up to R500 crore next year,” H S Shankar, chairman & managing director, told FE.
The funds will be used to set up two new greenfield manufacturing plants in Bengaluru to cater to the future orders from armed forces and export markets. It currently exports to Israel, the US and Germany, he said.
Alpha Design Technologies is engaged in the manufacture of a variety of electronic devices for armed forces. It has recently bagged a major export order from Israel’s Elbit Systems valued at $6 million for the supply of 600 units of VHF communication devices for armoured vehicles. “We have also offered to supply these radio sets directly to the Indian Army with customisation for their battle tank applications. We have got an in-principle approval from them and are awaiting final orders,” Shankar said.
The company proposes to raise funds to meet its expansion programme. It has acquired land from the Karnataka government at aerospace SEZ near the international airport to set up an export-oriented unit. It also plans to set up another manufacturing plant at Whitefield in Bengaluru to manufacture communications equipment and optoelectronic devices, among others, to meet the requirements from the armed forces.
Currently, the company has two manufacturing plants in Bengaluru, where it produces radio communication & thermal cameras and software-defined radio sets, among others. The company has established its capabilities in delivering defence electronics and aero structures in the defence electronics market over the last 13 years.
Alpha Design Technologies has also been pre-qualified by the Indian Army to participate in the upcoming tender for next-generation software defined radio (SDR). The company has indigenously developed both software and hardware for the the radio set for handheld, manpack and vehicular applications and is currently testing the equipment, a senior company official said.
The company has supplied defence electronics equipment worth over $100 million in the past five years and currently has an order book of R2,500 crore. The company’s sales grew 75% to R402 crore in 2015-16, of which 80% came from exports. It is looking at a three-fold growth to touch a level of Rs 1,200 crore in the next three years, Shankar said.