19/06/2015 3:21 PM IST | Updated 15/07/2016 8:25 AM IST

Make In India: Mahindra Aeropsace Raising Funds To Expand Defence Parts Manufacturing

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BRISTOL, ENGLAND - MARCH 05: A jet engine is seen as engineers work on the carbon-fibre body of the Bloodhound SSC vehicle currently taking shape at its design centre in Avonmouth on March 5, 2015 in Bristol, England. It is hoped that when finished, the Bloodhound SSC car, which is powered by a Eurofighter jet engine and a rocket, will break the current land speed record of 763mph or 1228km/h. Although the Bloodhound SSC is a private venture it has substantial in-kind support from the UK government and is being used as a education resource with the hope that it will encourage more pupils to follow science and technology-related courses. (Photo by Matt Cardy/Getty Images)

Mahindra Aerospace is in a hurry to capture the huge defence procurement market in India as other competitors race to win lucrative contracts.

Part of the $17 billion Mahindra Group, the company is now in talks with private equity groups to raise between $50-80 million, reports Mint. Mahindra Aerospace will use the funds to expands its manufacturing capability and acquire smaller firms, the report said.

The company has a manufacturing unit near Bangalore, and in Australia where it produces an eight-seater aircraft. The new funds will help it compete better with peers in supplying parts and equipment for defence projects of global majors like Airbus and General Electric.

A spokesperson at Mahindra Group said they won't comment on speculative stories, in response to HuffPost's email.

This news comes after the company signed a flurry of contracts last week at the Paris International Air Show. The first contract is with GE Aviation, a unit of General Electric Co., to make small, metallic complex structural sheets. The second was signed with Germany's Premium AEROTEC, a Airbus subsidiary to make metallic components for Airbus aircraft. The third contract was with Canada's Magellan Aerospace to supply sheet metal and the fabricated detailed parts to support major assemblies. And the fourth was with Airbus again, this time for its single-aisle aircraft to be manufactured in Hampshire, England. The supplies for the above contracts will happen from its Bangalore factory.

This is good time to invest in defence. Prime Minister Narendra Modi has encouraged higher defence procurement from India, and said that a 20-25 percent reduction in imports can result in upto 120,000 skilled jobs in India. His government is expected to spend $620 billion by 2022 on defence, half of which will be capital expenditure.

Most Indian companies that have significant manufacturing abilities have been foraying deeper in defence. In February, Bharat Forge, Anil Ambani's Reliance Group, Larsen and Toubro, Godrej and Mahindra Group had announced new subsidiaries dedicated to defence contracts, and signed partnerships with global defence equipment majors such as Boeing, Raytheon and France's Dassault Aviation.

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