Shares of Reliance Defence and Reliance Infrastructure advanced up to 10 per cent in trade on Monday after Rafale maker Dassault Aviation and Anil Ambani-led Reliance Group announced a joint venture (JV) that will be a "key player" in execution of offset contract worth about Rs 22,000 crore as part of the fighter jet deal.
Reacting to the news, the stock of the Reliance Defence surged as much as 10.45 per cent, while the stock of Reliance Infrastructure gained 6 per cent on the BSE.
Reacting to the news, the stock of the Reliance Defence surged as much as 10.45 per cent, while the stock of Reliance Infrastructure gained 6 per cent on the BSE.
The announcement of the JV, Dassault Reliance Aerospace, comes within days of India and France on September 23 signing an agreement for 36 Rafale fighter jets at a value of euro 7.87 billion, or about Rs 59,000 crore.
The agreement includes a 50 per cent offset obligation, the largest-ever offset contract in the history of India.
The main point of the offset agreement is 74 per cent of it has to be imported from India, which means direct business worth around Rs 22,000 crore.
The offset, spread over seven years, will be finalised soon.
There is also a technology-sharing component, which is being discussed with the Defence Research and Development Organisation (DRDO).
"We are delighted to partner a world leader in aviation like Dassault Aviation. This is a transformational moment for the Indian aerospace sector and Reliance Infrastructure's subsidiary Reliance Aerospace," said Anil Ambani, Chairman of the Reliance Group.
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