Points mentioned by Sir:

1. Consider RDA to be a well-established company asking for Working Capital Financing.2. Take a look at all the major long term contracts signed by RDA for working capital financing.3. Look at the working capital cycle of manufacturing helicopters4. Use the RBI Guidelines for working capital financing

a. Tandon Committee Reportb. Chore Committee Report

5. Look at how Indian Armed Forces pay Indian companies such as HAL (whether in tranches and how)

6. What is the ROI companies like HAL get?7. Look at helicopters similar to Kamov for which data is available.

Deal Details:

Russia last month, tied up with Reliance Defense Ltd for manufacturing Kamov 226T helicopters.

In a letter sent to the Indian government, Russia disclosed the understanding with subsidiary alliance with Reliance infrastructure indicating that Reliance could be led integrator for manufacturing 200 twin engine helicopters for Indian Army.

As per the contract, the manufacturing technology of helicopters is to be handed to any of the Indian company.

Sources revealed that 50% of the machine will be manufactured from its parts. Reliance group has applied for the manufacture of the machine.

Gautam Adani’s defense venture is also reported to have applied for the similar license. If Reliance Defense Ltd gets the deal, then it will become the first firm to be a prime integrator of any military chopper in India.

Points to Look at:

1. Defence Manufacturing in general and helicopter manufacturing in particular2. Working Capital Requirements for Helicopter / Defence Manufacturing3. What do banks look at when appraising loans for working capital?4. RBI Regulation / Guidelines in this regard.5. Currently, who is manufacturing Kamov 226T? Is it possible to obtain their financials?6.