HFCL restructures defence business through ₹264 crore investments, acquisitions and transfers

Telecom gear maker HFCL Ltd on Wednesday (June 3) approved multiple transactions to consolidate and expand its defence and aerospace business through HFCL Advance Systems Private Ltd (HASPL). HFCL approved an investment of ₹89.25 crore in HFCL Advance Systems Private through subscription to equity shares in two tranches under a share subscription agreement.

The company said a total investment of ₹175 crore will be made in HFCL Advance Systems Private by HFCL, Anant Nahata, Sushant Mohan Gupta, Shubhra Gupta, BAS Engineering Private Limited and ITI Holdings and Investment Private Ltd.

Post completion of the transaction, HFCL will hold 51.02% stake in HFCL Advance Systems Private. ITI Holdings and Investment Private Limited and the proposed HFCL Advance Employee Trust will each hold 14.99%, while Anant Nahata will hold 6.50%. Sushant Mohan Gupta and Shubhra Gupta will each hold 4.75%, and BAS Engineering Private Limited will hold 3%.

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HFCL said a shareholders’ agreement has also been executed among the investors to govern management, administration and shareholder rights in HFCL Advance Systems Private. The agreement provides for a six-member board, with the HFCL Group having rights to nominate four directors and the DMG Group nominating two directors.

The company also approved the sale of up to 80% stake in Raddef Private Ltd to HFCL Advance Systems Private for ₹75 crore through a share purchase agreement. Raddef contributed ₹9.04 crore in revenue during FY26.

HFCL further approved the transfer of its thermal weapon sight business to HASPL on a slump sale basis for ₹50 crore. The business contributed ₹0.66 crore in revenue and ₹21.24 crore in net worth in FY26.

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Separately, HFCL Advance Systems Private approved the acquisition of 100% stake in HFCL Defence Systems Private Ltd from Defsys Solutions Private Ltd for ₹25 crore. HFCL Defence Systems Private recorded an unaudited turnover of ₹166.21 crore and net worth of ₹19.37 crore in FY26.

Following the acquisition, HFCL Advance Systems Private will invest ₹25 crore in HFCL Defence Systems Private Ltd for the acquisition of the aerostructure business of Defsys Solutions through a slump sale transaction.

HFCL said the transactions are intended to create a focused and scalable defence platform integrating aerostructure manufacturing, radar and surveillance systems, and thermal weapon sight solutions.

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The company said the structure will provide access to an export order book of around ₹1,890 crore along with manufacturing capabilities, certifications and customer relationships. Shares of HFCL Ltd ended at ₹199.85, up by ₹9.45, or 4.96%, on the BSE.