Shares of Lumax Auto Technologies are growing by 14,6% on a joint venture with Italian company as it forays into defence space. “Lumax announced its entry into the Indian aerospace and defence sector by formation of it’s new joint venture with SIPAL S.p.A of Italy (part of the Turin based euro 240 million FININC S.p.A. group),” says the New Delhi-based and DK Jain Group company in its filing. As per the JV agreement, Lumax will hold 51 percent equity with management control over JV and SIPAL S.p.A. will hold 49 percent equity in new JV company Lumax SIPAL Engineering Private limited.
The proposed JV is expected to become operational in FY17 and will be a full service provider for all type of integrated logistic support engineering having a strong knowledge and experience in technical publishing, product / manufacturing engineering, Process engineering, design and manufacture of toolings, design of systems of production lines related to the aerospace, defence & automotive sectors, it says. The Indian aerospace and defence market presents an attractive and significant opportunity for Indian and foreign companies across the supply chain as India has the third-largest armed forces in the world and it’s defence budget is about 2.5 percent of its GDP. India is one of the largest importers of conventional defence equipment and spends about 32 percent of its total defence budget on capital acquisitions. About 60 percent of its defence requirements are met through imports. “This offers a great opportunity for Lumax,” says Anmol Jain, Managing Director.