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French military aircraft and business jet maker Dassault Aviation will increase its shareholding in its joint-venture with Anil Ambani-led Reliance Group to a controlling stake of 51 per cent from the current 49 per cent, Reliance Infrastructure informed the stock exchanges Friday. The transaction will involve Reliance Infrastructure arm Reliance Aerostructure transferring 2 per cent stake in the joint-venture—Dassault Reliance Aerospace (DRAL)—to Dassault for around Rs 176 crore. The transaction is expected to be completed by November 1.
“Upon completion of transaction, DRAL will cease to be a 51% subsidiary and become Company’s (Reliance Infrastructure’s) associate company with 49% shareholding,” Reliance Infrastructure said in the exchange filing. With DRAL becoming a subsidiary of Dassault Aviation, it will help the company ensure guarantees, warranties, and service commitments for customers in India and around the world. DRAL was established to fulfill the offset obligations as part of the Rafale fighter jet deal between the Indian government and Dassault.
Dassault and Reliance Group had announced in June that DRAL will set up a final assembly line (FAL) for manufacturing the Dassault’s best-selling business executive jet—the Falcon 2000—at Nagpur. The decision to hike stake in DRAL follows Dassault’s decision to designate DRAL as a centre of excellence for the Falcon aircraft. With the DRAL FAL, Dassault will manufacture the Falcon aircraft outside of France for the first time. The announcement of transfer of controlling stake to Dassault comes also at a time when some Reliance Group entities are grappling with challenges including a money laundering probe by the Enforcement Directorate, and allegations of loan fraud. In its exchange filing, Reliance Infrastructure did not detail the reasons for transfer of controlling stake in DRAL to Dassault.
The French company has had a long-standing relationship with India, most notably through its fighter jets Mirage 2000 and Rafale that are part of the Indian Air Force’s fleet of fighters. Barely two weeks before the DRAL FAL for Falcon jets was announced, Dassault and Tata Advanced Systems (TASL) had announced that the latter will set up a production facility in Hyderabad to manufacture key structural sections of the Rafale, including the lateral shells of the rear fuselage, the complete rear section, the central fuselage, and the front section.
The DRAL FAL for the Falcon jets would be the first-ever instance of a foreign aircraft manufacturer setting up a final assembly line (FAL) in India for civilian aircraft. European aerospace major Airbus, which has a minority stake in Dassault, will be setting up an FAL in India in partnership with the Tata group, but that will be for manufacturing helicopters. Airbus and Tata Advanced Systems already have an FAL in India for the C295 military transport aircraft.
The first made-in-India Falcon 2000 jet is expected to be ready by 2028, and planes manufactured in India will cater to rising business jet demand in the domestic and international markets, according to Dassault and Reliance Group. At Mihan, Nagpur, DRAL already has a manufacturing facility for making various sections of the Falcon 2000. Since delivering its first Falcon 2000 front section in 2019, DRAL has assembled over 100 major sub-sections for the Falcon 2000.
Dassault will also transfer the assembly of the front section of Falcon 8X and Falcon 6X—two other jets in the Falcon family of aircraft—in addition to the wings and complete fuselage assembly of Falcon 2000 to DRAL. Currently, around 2,200 Falcon family jets are in service in over 90 countries.
