VCCircle

Even though a Nuke treaty with the US is still hanging in fire, probably this may be a good time to look at companies that supply components and products to the defence sector. The Economic Times today reports that buyout fund Blackstone may close in on such a Hyderabad based company to buy stake. The US private equity fund is apparently eyeing a 25-30 per cent stake in nuclear and space science components company MTAR Technologies. ET even puts a figure for investment - around Rs 300 crore. If the deal finally closes, that will be the first PE investment in the defence and nuclear sector in India.

I wonder if the government will raise security bogey here since it's a sensitive sector, and the PE investors are mostly made up of foreign money - can be from anywhere, the US, the Middle East, and so on.

In the case of the privately-held MTAR, the company makes critical components and products for nuclear reactors. MTAR had apparently indigenously developed a grid plate technology to be used in the 500 MW prototype fast breeder nuclear reactor project coming up at Kalpakkam in Tamil Nadu. The company has won awards from the Defence Research and Development Organisation for defence absorption.