Dassault Aviation to Acquire Majority Stake in Joint Venture with Reliance for Rs 176 Crore

Dassault Aviation, the French defence giant, is set to strengthen its position in India's aerospace sector through a significant investment in its joint venture with Reliance Group. The company has announced plans to invest Rs 176.00 crore to acquire a majority stake in Dassault Reliance Aerospace Ltd. (DRAL), a move that will reshape the ownership structure of this key Indo-French aerospace collaboration.

Deal Structure and Implications

Dassault Aviation has signed an agreement with Reliance Aerostructure Ltd. to acquire an additional 2% equity stake in DRAL. This strategic transaction will tip the scales of ownership, transforming DRAL from a subsidiary of Reliance Infrastructure to an associate company. Post-deal, the ownership structure will be as follows:

• Dassault Aviation: 51% stake
• Reliance Group: 49% stake

The deal, valued at approximately Rs 176.00 crore, is based on an independent valuation and is scheduled for completion by November 1, 2025.

Impact on Reliance Infrastructure

According to the disclosure made by Reliance Infrastructure Limited to the stock exchanges, DRAL contributed the following to Reliance Infrastructure's consolidated financials for the year ending March 31, 2025:

Upon completion of this transaction, DRAL will cease to be a 51% subsidiary of Reliance Infrastructure and will be reclassified as an associate company.

Strategic Significance

This move underscores Dassault Aviation's commitment to its Indian operations and the strategic importance of DRAL in its global supply chain. Dassault Aviation, known for its role as the integrator of Rafale and Falcon aircraft, brings significant expertise in manufacturing airframes and subsystems for these advanced aircraft.

The increased stake in DRAL is likely to facilitate greater technology transfer and potentially expand the scope of aerospace manufacturing activities in India, aligning with the country's push for self-reliance in defence production.

Looking Ahead

As the aerospace and defence sectors in India continue to evolve, this deal positions DRAL to play a more significant role in Dassault Aviation's global operations. It also reflects the growing confidence of international aerospace companies in India's manufacturing capabilities and its potential as a key player in the global aerospace supply chain.

The completion of this transaction will be closely watched by industry observers, as it could set a precedent for similar strategic investments in India's burgeoning aerospace and defence manufacturing sector.