its twitter.....
Statement by Nibe on recent article on PULS.
Question is what IP will be owned by Indian companies. If no IP is owned then its screwdrivergiri.
Though I agree that defence handles shouldn't indulge in rumor-mongering and peddling lies to disparage foreign systems.
https://www.drvijaymalik.com/nibe/
Nibe Ltd was originally named Kavita Fabrics Ltd. It was owned by the Chandak family with operations of making synthetic fabrics in Surat, Gujarat.
FY2014 annual report, page 15:
The company had come up with an initial public offer (IPO) in Feb. 2013 when it raised ₹5.1 cr at the BSE SME exchange at ₹40/- per share (Source).
Over the years, the business of the company suffered and its share price declined from the IPO price of ₹40/- to a low of ₹5.85 in July 2019. The key reason for the decline was the significant deterioration in the business of the company where it was making losses.
When the textile business of Kavita Fabrics Ltd was declining, Mr Ganesh Nibe along with his wife Ms Manjusha Nibhe started accumulating shares of the company from FY2016. By FY2020, when they had acquired a 29.58% stake in the company, they acquired control of the management of the company after making an open offer to the public and raising their stake to 58.47%.
FY2020 annual report, page 23:
At this time, the name of the company was changed from Kavita Fabrics Ltd to Nibe Ltd and the company changed its object clause to expand the scope of its business activities from textile to EPC, electric goods, aviation, defence etc. (FY2020 annual report, page 18).
Therefore, the current promoter/manager of the company, Mr Ganesh Nibe, got control of the company in FY2020. As per the company’s website (click here), Mr Ganesh Nibe has a working background in sugarcane juice and furnace oil distribution. In 2013, he started his contracting business and in 2021 he entered the defence business.
Therefore, even though, Nibe Ltd had a textile business under previous promoters (the Chandak family), its current business of defence, aerospace and electric vehicles started only in FY2021 when Mr Ganesh Nibe took it over.
From FY2022, the company started incorporating subsidiaries and from FY2023 onwards, it started reporting consolidated financial results. On June 30, 2024, the company has 6 subsidiary companies (Q1-FY2025 results, page 12):
During this time, the operating profit margin (OPM) of Nibe Ltd has also improved from operating loss to 13% in FY2024. In addition, the net profit margin (NPM) of the company has also improved from a net loss to 7% in FY2024.
After spending about ₹3.5 cr, in Feb. 2020, what Mr Nibe bought/received from earlier promoters was just a publicly listed company on paper. All the fixed assets/plant, investments etc. were already moved out of the company and only furniture & fixtures of net value of about ₹90,000 were left.
In any case, Mr Nibe seemed to have no interest in the textile business of the company, its plant, its customers etc. as he soon changed the object of the company to include EPC, electric goods, aviation, defence etc. (FY2020 annual report, page 18). He shifted the office of the company from Surat to Chakan, Pune (FY2021 annual report, page 55). He soon started trading activities in the company and then started constructing manufacturing plants focusing on defence & aerospace in Pune.
So, the acquisition of Kavita Fabrics Ltd was not for its textile business, customers or its manufacturing plant. Mr Nibe could have easily established his business independent of the acquisition of Kavita Fabrics Ltd by just starting a new company in Pune and commencing trading or manufacturing activities.
It seems that the acquisition of Kavita Fabrics Ltd was to acquire control of a company having a listed status.
One key reason for such an acquisition could be to have a good reputation while bidding for tenders/entering into negotiations with other companies/counterparties. However, such agreements can easily be entered even by a private company if the counterparty finds value in the offering.
The other reason can be the ease with which investors can put money in the company and then exit whenever they want by selling shares in the market, which seems one of the reasons because after taking control by Mr Nibe, the company has raised money from multiple investors via preferential allotment of equity shares. In addition, the promoters have been allotted a significant number of warrants in FY2023 and FY2024, which they converted into shares by exercising them.
Similar to acquiring Kavita Fabrics Ltd and converting it into Nibe Ltd., currently, Mr Nibe has acquired control of another BSE-listed company, Anshuni Commercials Ltd and renamed it Nibe Ordnance & Maritime Ltd. Anshuni Commercials Ltd used to be a company trading in gems & jewellery, which had nearly shut down its business with nil sales in FY2022, FY2023 and FY2024 and nil fixed assets (Source: Screener).
On June 30, 2024, in Anshuni Commercials Ltd/Nibe Ordnance & Maritime Ltd, Mr Ganesh Nibe holds a 69.98% stake, Ms Manjusha Ganesh Nibhe holds a 20% stake and Nibe Ltd holds a 5% stake (Source: BSE).
Therefore, it seems that Mr Ganesh Nibe is interested in acquiring public-listed companies with almost nil business activities.
An investor may ask the company/promoters why they are not able to do any business activity that they plan to execute in Anshuni Commercials Ltd/Nibe Ordnance & Maritime Ltd under the existing business setup of Nibe Ltd or by creating its wholly-owned subsidiary.
The number of people who have resigned from each of these posts within a short history of a few years is more than any other company that we have analysed to date.
For example, take the case of statutory auditors:
This pattern of quick resignations is not limited to people in supervisory functions like auditors. The company has seen very high churn in other key managerial positions like chief financial officer (CFO) as well as chief executive officer (CEO).
PS I am not posting the whole article as it is too big. Do read point 3) Business activities of Nibe Ltd and 4) Corporate filings done by Nibe Ltd from the link.
Nibe Ltd: Detailed Fundamental Analysis
Nibe Ltd was originally named Kavita Fabrics Ltd. It was owned by the Chandak family with operations of making synthetic fabrics in Surat, Gujarat.FY2014 annual report, page 15:
The company had come up with an initial public offer (IPO) in Feb. 2013 when it raised ₹5.1 cr at the BSE SME exchange at ₹40/- per share (Source).
Over the years, the business of the company suffered and its share price declined from the IPO price of ₹40/- to a low of ₹5.85 in July 2019. The key reason for the decline was the significant deterioration in the business of the company where it was making losses.
When the textile business of Kavita Fabrics Ltd was declining, Mr Ganesh Nibe along with his wife Ms Manjusha Nibhe started accumulating shares of the company from FY2016. By FY2020, when they had acquired a 29.58% stake in the company, they acquired control of the management of the company after making an open offer to the public and raising their stake to 58.47%.
FY2020 annual report, page 23:
At this time, the name of the company was changed from Kavita Fabrics Ltd to Nibe Ltd and the company changed its object clause to expand the scope of its business activities from textile to EPC, electric goods, aviation, defence etc. (FY2020 annual report, page 18).
Therefore, the current promoter/manager of the company, Mr Ganesh Nibe, got control of the company in FY2020. As per the company’s website (click here), Mr Ganesh Nibe has a working background in sugarcane juice and furnace oil distribution. In 2013, he started his contracting business and in 2021 he entered the defence business.
Therefore, even though, Nibe Ltd had a textile business under previous promoters (the Chandak family), its current business of defence, aerospace and electric vehicles started only in FY2021 when Mr Ganesh Nibe took it over.
From FY2022, the company started incorporating subsidiaries and from FY2023 onwards, it started reporting consolidated financial results. On June 30, 2024, the company has 6 subsidiary companies (Q1-FY2025 results, page 12):
- Nibe Automobile Ltd (earlier known as Nibe E-Motors Ltd)
- Nibe Defense & Aerospace Ltd.
- Karmayogi Manufacturing Pvt Ltd
- Nibe Meson Naval Ltd
- Nibe Technologies Private Limited (earlier known as Indigeneous Casting Technology Pvt. Ltd.)
- Nibe Space Private Limited
Financial and Business Analysis of Nibe Ltd:
As mentioned earlier, until FY2020, the textile business of the company was deteriorating and then the current promoters took over the company and changed its business. Thereafter, the sales of the company increased from ₹1.4 cr in FY2020 to ₹282 cr in FY2024. Further, sales have increased to ₹366 cr in the 12 months ending June 2024 (July 2023-June 2024).During this time, the operating profit margin (OPM) of Nibe Ltd has also improved from operating loss to 13% in FY2024. In addition, the net profit margin (NPM) of the company has also improved from a net loss to 7% in FY2024.
1) Rationale for taking over control of Kavita Fabrics Ltd:
When Mr Ganesh Nibe took control of the company, in 2020 after acquiring shares from the market, promoters and the open offer, by that time he had spent a total of about ₹3.48 cr as acquisition cost. The below table contains the data on the acquisition of shares taken from the BSE website.After spending about ₹3.5 cr, in Feb. 2020, what Mr Nibe bought/received from earlier promoters was just a publicly listed company on paper. All the fixed assets/plant, investments etc. were already moved out of the company and only furniture & fixtures of net value of about ₹90,000 were left.
In any case, Mr Nibe seemed to have no interest in the textile business of the company, its plant, its customers etc. as he soon changed the object of the company to include EPC, electric goods, aviation, defence etc. (FY2020 annual report, page 18). He shifted the office of the company from Surat to Chakan, Pune (FY2021 annual report, page 55). He soon started trading activities in the company and then started constructing manufacturing plants focusing on defence & aerospace in Pune.
So, the acquisition of Kavita Fabrics Ltd was not for its textile business, customers or its manufacturing plant. Mr Nibe could have easily established his business independent of the acquisition of Kavita Fabrics Ltd by just starting a new company in Pune and commencing trading or manufacturing activities.
It seems that the acquisition of Kavita Fabrics Ltd was to acquire control of a company having a listed status.
One key reason for such an acquisition could be to have a good reputation while bidding for tenders/entering into negotiations with other companies/counterparties. However, such agreements can easily be entered even by a private company if the counterparty finds value in the offering.
The other reason can be the ease with which investors can put money in the company and then exit whenever they want by selling shares in the market, which seems one of the reasons because after taking control by Mr Nibe, the company has raised money from multiple investors via preferential allotment of equity shares. In addition, the promoters have been allotted a significant number of warrants in FY2023 and FY2024, which they converted into shares by exercising them.
Similar to acquiring Kavita Fabrics Ltd and converting it into Nibe Ltd., currently, Mr Nibe has acquired control of another BSE-listed company, Anshuni Commercials Ltd and renamed it Nibe Ordnance & Maritime Ltd. Anshuni Commercials Ltd used to be a company trading in gems & jewellery, which had nearly shut down its business with nil sales in FY2022, FY2023 and FY2024 and nil fixed assets (Source: Screener).
On June 30, 2024, in Anshuni Commercials Ltd/Nibe Ordnance & Maritime Ltd, Mr Ganesh Nibe holds a 69.98% stake, Ms Manjusha Ganesh Nibhe holds a 20% stake and Nibe Ltd holds a 5% stake (Source: BSE).
Therefore, it seems that Mr Ganesh Nibe is interested in acquiring public-listed companies with almost nil business activities.
An investor may ask the company/promoters why they are not able to do any business activity that they plan to execute in Anshuni Commercials Ltd/Nibe Ordnance & Maritime Ltd under the existing business setup of Nibe Ltd or by creating its wholly-owned subsidiary.
2) Very frequent resignations of many key executives of Nibe Ltd:
Ever since Mr Ganesh Nibe took over Kavita Fabrics Ltd and started his business activities by renaming it Nibe Ltd, outside people with access to critical events/information have resigned one after another repeatedly. The list includes statutory auditors, internal auditors, chief executive officer (CEO), chief financial officer (CFO), company secretary as well as independent directors.The number of people who have resigned from each of these posts within a short history of a few years is more than any other company that we have analysed to date.
For example, take the case of statutory auditors:
- Mr Nibe got control of the company in Feb. 2020 and the company changed the statutory auditor of the company for FY2021 to Sharp Aarth & Co (FY2021 annual report, page 67).
- Soon, the statutory auditor changed again, in FY2023, to R T Jain and Co. LLP (FY2023 annual report, page 56)
- The very next year, FY2024, the statutory auditor of the company was changed to Bhatter & Co.
- However, even Bhatter & Co. has resigned now, and in the AGM for 2024, the company is taking approval to appoint a new statutory auditor: Kailash Chand Jain & Co. (FY2024 annual report, page 6)
This pattern of quick resignations is not limited to people in supervisory functions like auditors. The company has seen very high churn in other key managerial positions like chief financial officer (CFO) as well as chief executive officer (CEO).
PS I am not posting the whole article as it is too big. Do read point 3) Business activities of Nibe Ltd and 4) Corporate filings done by Nibe Ltd from the link.
The trasition is certainly interesting. It is a rebadging driven enterprise for now. The question is how much are they investing in enhancing their SCO and IP operations? The lack of a heavy engineering and even a subsystem development background poses some questions that will continue to circulate for a while. The fact that they got their paper work sorted and delivery started in 5 odd months is quite the achievement considering how procurement works for MoD.
This particular aspect is rather concerning:
This pattern of quick resignations is not limited to people in supervisory functions like auditors. The company has seen very high churn in other key managerial positions like chief financial officer (CFO) as well as chief executive officer (CEO).
The IP rights for the Make in India initiative are not a major issue if alternative systems are available in India. If a company is manufacturing a system for which a similar system already exists in India such as defence vehicles, missile systems, artillery systems, or radar systems which is non-crtical tech like Jet engine... the percentage of manufacturing done in India is more important than the IP rights.
The real advantage of manufacturing in India is the development of sub-component-level manufacturing and a domestic supply chain. Once the supply chain for components is established, the manufacturing cost of the product can become among the lowest in the world. Over time, the product owner, who may have previously manufactured the system in countries like South Africa or Sweden, will be compelled to manufacture it in India because it offers the highest profit margins.
This is the same concept China has followed, which is why it has become the world's manufacturing hub for everything from hairpins to TBMs.
It is their background and their paperwork that makes me question the EP pace. However, I understand what you are trying to convey.
Nibe Limited successfully demonstrated on NC-NC basis, the capabilities of Garudastra, its advanced Long Range 120mm Vehicle Mounted Mortar System, showcasing rapid shoot-and-scoot operations, high-rate of fire, Multiple Rounds Simultaneous Impact (MRSI) and precision engagement of the Guided Munition using GPS and Laser guidance. The demonstration was conducted at the Infantry School Mhow. This successful demonstration further reinforces Nibe Limited's commitment to advancing indigenous defence capabilities through strategic collaboration with a foreign OEM, while aligning with the Government of India's 'Make in India' and 'Atmanirbhar Bharat' initiatives. Garudastra exemplifies Nibe's dedication to delivering world-class, future-ready defence solutions developed to meet the evolving requirements of the Indian Armed Forces: Nibe Limited
Both types of guidance, that's interesting. When we used the guided russian shells from M46 they were laser guided while the excaliburs from m777 are gps.
Both types of guidance, that's interesting. When we used the guided russian shells from M46 they were laser guided while the excaliburs from m777 are gps.
This entire Nibe related EP once again highlights that IA was slow-footed when it came to augmenting its RF related activities. Solar and others have sufficient background in developing such rockets. However, their offers fell on deaf ears as OP Sindoor had not taken place. GoI/MoD should take notes in such cases and question why a conflict is needed to suddenly spur or advance capabilities (so called stop-gap measures). The EP nudge more often than not ends up costing the Tax payer a pretty penny.
This is all theory. Things don't work like this in reality. What happens is that the OEM ties up with a local "manufacturer" who imports all the advanced components from another country, screwdrivers them together and sells it to army as a locally "manufactured" product. Once army orders are done, no further orders are received.
This is what has happened in su30 MKI. Despite a huge order and building these jets from scratch in india, no component supply chain got created in india, and other flankers in Russia or other countries don't use Indian components.
If local manufacturing of Su30MKI from scratch didn't create a component supply chain in India, then kindly explain how the following is possible?
Samtel Avionics and ATSC forge strategic collaboration to boost RMAF avionics capability - CNBC TV18
The collaboration also includes provisions for technology transfer and local capability development, ensuring that Malaysia’s defence sector benefits from sustained technical know-how and reduced foreign dependency.
What is contribution of such avionics to total value of MKI?If local manufacturing of Su30MKI from scratch didn't create a component supply chain in India, then kindly explain how the following is possible?
Samtel Avionics and ATSC forge strategic collaboration to boost RMAF avionics capability - CNBC TV18
The collaboration also includes provisions for technology transfer and local capability development, ensuring that Malaysia’s defence sector benefits from sustained technical know-how and reduced foreign dependency.www.cnbctv18.com
Quite a lot, because without these multi-function displays you would basically be flying the thing on a hope and a prayer.
The brain of the aircraft, the mission computer is also something that is developed indigenously that allows seamless integration of weapons onto the Su30 MKI, probably far more seamlessly than any other aircraft in the IAF fleet.
Dude do you even understand what you are saying?
Both the Samtel MFD and HAL mission computers are our own components. Their IP is owned by indian companies. You are exactly proving my point that licensed manufacturing only creates value when IP is indian.
Had this procurement been done like the Nibe procurement, the IP would have been Russian, like MKI radar and engine are still are still Russian. Even after "manufacturing" 270 of them, no country gives order to HAL to buy flanker radar and engines.
Partially true. But license production of aircrafts did allow us to design and develop multiple subsystems and components of aircrafts. Su-30 MKI is made majority in India by value, including its engine from raw material stage. In fact it is more indigenous by value than LCA MK1A currently is. But the thing is, it allowed us to indigenise a lot of avionics, engine components and allowed private firms to gain experience in manufacturing fuselage components and other sub-assemblies.
Problem with firms like these screwdrivering foreign products is that they have no willingness to localise the way PSUs had as they could absorb operational losses or revenue loss. A private firm is profit first and is answerable to its shareholders. So they have no incentive to localise components to other Indian firms (unless an import ban or PLI-like scheme is introduced) which will increase the costs further in the short-medium run while also sending back royalties to OEM/Licensor who already have economies of scale of the components involved.
It is cheaper for me to buy components for a smartphone from china, assemble and sell than it is to localise the same components from Indian players that increases the costs multi-fold. More so, when we talk about defence equipment, not consumer goods like smartphones, that too of foreign IPR.
All of our supply chains have been developed thanks to PSUs whether license producing stuff or making IDDM products. So whatever little localisation these penny-pinching private firms are able to achieve, is because of decades of heavy lifting by PSUs. So I agree that when all advanced components are coming from abroad and IPR is not with you, such screwdrivering simply must not be entertained beyond a certain point.
Yes, I am fully aware of what I am saying.
I was putting forth a counter-argument with hard facts to your claim that even after manufacturing Su30MKI from scratch in India, no supply chain was created, which is completely false and the vendors I have mentioned are a tiny fraction of the MSMEs that have been involved in the manufacturing program.
A supply chain isn't just limited to radar and engines, although they form a major chunk of the % by value calculation due to higher per unit costs by nature & by complexity.
Yes which is what I am saying. Value is only where IP is indian. But the way nibe emergency procurement is going, no IP will be indian
That's a typo wrt engine.
By value, India only makes 54%.
By subcomponent count, it might indeed be much higher at 80% -- but the raw materials all still come from Russia.
That said, we are all generally aligned that we have hit the limits of screwdriver work. The next paradigm shift will only come from the IDDM path. Making the SX blades for KDE is what unlocked it for AL31FP and not the other way around.