Mahindra signs agreement with Telephonics Corporation to form JV

Mahindra & Mahindra Limited and Telephonics Corporation, a subsidiary of Griffon Corporation (NYSE:GFF) have signed an agreement to form a Joint Venture. The JV will provide the Indian Ministry of Defence and the Indian Civil sector with radar and surveillance systems, Identification Friend or Foe (IFF) devices, and communication systems. In addition, the JV intends to provide systems for Air Traffic Management Services, Homeland Security, and other merging surveillance requirements.

The company will be known as Mahindra-Telephonics Integrated Systems Limited and will be formed in the coming months after obatining all approvals. The Foreign Investment Promotion Bureau had given the clearance for formation of the JV on April 24, 2012.

The company will be establishing a plant in Bangalore, which will initially manufacture and service airborne radar systems that are already being supplied to Hindustan Aeronautics Ltd and support airborne maritime surveillance systems for the Indian Navy and Coast Guard. Telephonics supplies RDR-1400 weather avoidance radar systems for helicopters being built in Bangalore, India. It is also contracted to supply Boeing with APS-143C(V)3 multi-mode radar for India's P-8i Maritime Surveillance aircraft, and is responsible for installation of a sophisticated intercommunication system for the C-17 Globemaster contracted by the Indian Air Force.

Mahindra-Telephonics will license technology from Telephonics for use on a wide range of products that have both defence and civil applications.

The JV will be the first private sector company in India to manufacture airborne and maritime radars utilizing licensed technology. Nearly 100% indigenous capability is expected to be achieved in the near future. The JV will also be strategically poised to develop future technologies for civil and military applications.

The Mahindra & Mahindra Ltd stock was trading at Rs.692.70, down by Rs.5.55 or 0.79%. The stock hit an intraday high of Rs.698 and low of Rs.690.

The total traded quantity was 0.16 lakhs compared to 2 week average of 0.54 lakhs.

Source : Equity Bulls

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