246-year-old Ordnance Factory Board scrapped; 7 new companies to take over

Corporatization of Ordnance Factories​

Posted On: 26 JUL 2021 3:25PM by PIB Delhi
To enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories, the Government has decided to convert the production units of Ordnance Factory Board into 07 Defence Public Sector Undertakings. The details are as under:-


Table : Press Information Bureau


The OFB employees’ Federations and Associations have opposed the Government decision to corporatize OFB. The employees’ Federations have intimated vide letter dated 29.06.2021 that they would serve strike notice on 08.07.2021 and would commence indefinite strike from 26.07.2021. However, no such notice has been received till date.



The Government has held various discussions with the OFB employees’ Federations and Associations regarding the corporatisation of OFB under the Chairmanship of Secretary (Defence Production). Their concerns and suggestions were noted. Their main concern about safeguarding the interests of the employees of OFB has been adequately addressed. It is pertinent to mention that Chief Labour Commissioner (Central) also held discussions with Government & OFB Federations as part of the conciliation process under the Industrial Disputes Act 1947.



Regular interactions are being held with the stakeholders by the Government. The Defence Minister also held meeting with the recognised Defence Civilian employees’ Federations on 16.07.2021 and appealed them to continue discussions with the Department.



This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Shri M Shanmugam and Shri Kanakamedala Ravindra Kumar in Rajya Sabha today.



ABB/Nampi/KA/DK/Savvy
 
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Ashwin said:
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Govt dissolves OFB, transfers employees and assets to 7 PSUs

The OFB is currently a defence ministry entity and supplies critical arms and ammunition to the three armed forces and the paramilitary
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This is a huge reform delivered in a fast-track route !.

Now Give them the best corporate structure, direct list, monetize land, and make it a level playing field for private players. The market will take care of how and how many will survive.
 
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Post corporatisation, new defence PSU profits zoom past Rs 1500 cr. R&D will be the next big focusOfficial numbers show healthy Profit After Tax of seven companies carved out of OFB.

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Corporatised ordnance factories post record ₹3,500-crore export orders in 2024-25​

The corporatisation of the Ordnance Factory Board (OFB) into seven Defence Public Sector Undertakings (DPSUs) has delivered strong results, with record export orders worth nearly ₹3,500 crore secured in 2024-25, according to senior Defence Ministry officials.

Since October 2021, when 41 OFB units were reorganised into seven entities — Yantra India Limited (YIL), Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVNL), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), India Optel Limited (IOL) and Gliders India Limited (GIL) — six of the companies have posted profits.


According to the Ministry of Defence (MoD), from a cumulative loss of ₹2,844 crore in 2019-20, the entities have turned around, reporting profits of ₹31 crore in 2021-22 and ₹625 crore in 2022-23. In 2024-25, profits stood at ₹625 crore alongside the surge in export orders. Defence officials noted that only Troop Comforts Limited continues to lag behind, though its performance is expected to improve.

Exports have also grown sharply, rising from just ₹81 crore in 2019-20 to ₹3,500 crore in 2024-25, reflecting India’s push for self-reliance in defence production. MIL has emerged as the best performer among the new companies, added sources in the MoD.

In recognition of their performance, Defence Minister Rajnath Singh in May accorded “Miniratna Category-I” status for MIL, AVNL and IOL. During review meetings, he has consistently urged DPSUs to reduce expenditure and channel more funds into research and development to meet future demand as well as export orders.

Officials stressed that the corporatisation process was carried out smoothly without labour unrest, as all stakeholders were kept on board to enhance efficiency and productivity.

The MoD has declared 2025 as the ‘Year of Reforms’. The declaration aims at modernisation of the Armed Forces into a technologically-advanced, combat-ready force capable of multi-domain integrated operations and gives impetus to the ongoing and future reforms.
 
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