Five Years After OFB Restructuring, New Defence PSUs Show Stronger Financial Performance

Five years after the Ordnance Factory Board was dissolved and its 41 factories reorganised into seven Defence Public Sector Undertakings, official data shows a broad improvement in production, exports and profitability across much of the new corporate structure.

The seven companies — Munitions India Limited, Armoured Vehicles Nigam Limited, Advanced Weapons and Equipment India Limited, Troop Comforts Limited, Yantra India Limited, India Optel Limited and Gliders India Limited — were created in October 2021 to bring greater accountability, operational flexibility and commercial discipline to the former ordnance factory network.

By FY2025-26, production from the corporatised OFB entities had risen to ₹26,282 crore from ₹12,755 crore in FY2019-20, while exports increased from ₹81 crore to ₹4,561 crore.

Seven Specialised DPSUs Replace the Former OFB Structure

The restructuring divided the former Ordnance Factory Board into seven specialised companies, each focused on a defined product group.

Munitions India Limited took over ammunition and explosives, Armoured Vehicles Nigam Limited was assigned combat vehicles, Advanced Weapons and Equipment India Limited took charge of weapons and equipment, Troop Comforts Limited focused on troop clothing and related systems, Yantra India Limited handled ancillary and metallurgical products, India Optel Limited specialised in opto-electronics, and Gliders India Limited concentrated on parachutes and related equipment.

The objective was to move from a departmental production system to commercially accountable companies with clearer responsibility for output, technology development, exports and capital investment.

Production More Than Doubles From Pre-Corporatisation Levels

One of the clearest indicators of the change is the rise in output.

According to Ministry of Defence data, production by the corporatised former OFB entities increased from ₹12,755 crore in FY2019-20 to ₹26,282 crore in FY2025-26. Exports rose from ₹81 crore to ₹4,561 crore over the same period.

The increase is significant because the seven companies inherited a large legacy manufacturing network that had previously operated mainly as a government department rather than as individual commercial enterprises.

The new structure has given each company separate management, balance sheets and clearer responsibility for production efficiency, product development, exports and investment.

Six of the Seven Companies Were Profitable in FY2024-25

Public Enterprises Survey data for FY2024-25 shows that six of the seven new DPSUs reported net profits.

Advanced Weapons and Equipment India Limited recorded a net profit of about ₹82.74 crore, Armoured Vehicles Nigam Limited ₹334.93 crore, Gliders India Limited ₹16.67 crore, India Optel Limited ₹294.73 crore, Munitions India Limited ₹839.86 crore and Yantra India Limited ₹293.43 crore.

Troop Comforts Limited remained the exception, reporting a net loss of about ₹132.96 crore in FY2024-25. The loss, however, was lower than the approximately ₹303.07 crore reported in FY2023-24.

The figures show that the restructuring has produced uneven results across the seven companies, but the overall trend has moved towards stronger commercial performance.

Munitions India Emerges as the Largest of the New DPSUs

Munitions India Limited has become one of the strongest performers among the corporatised entities.

The company was granted Miniratna Category-I status in 2025 after demonstrating growth in turnover, profitability and operational performance. Its sales increased from ₹2,571.6 crore during the second half of FY2021-22 to a provisional ₹8,282 crore in FY2024-25.

Its product portfolio includes ammunition and explosives for the Armed Forces, placing it at the centre of India’s effort to expand indigenous ammunition manufacturing.

The Indian Navy has also continued structured production reviews with Munitions India to align ammunition supply with future operational requirements.

Yantra India Records Strong Growth in Sales and Exports

Yantra India Limited has also undergone a significant turnaround.

Its sales increased from ₹956.32 crore in the second half of FY2021-22 to ₹3,108.79 crore in FY2024-25, while exports rose from zero to ₹321.77 crore over the same period.

The company received Miniratna Category-I status in February 2026.

Yantra India manufactures materials and components used across ammunition, armoured vehicles, artillery systems and aerospace applications, including carbon-fibre composites, aluminium alloys and engineering assemblies.

The company is also moving into higher-value metallurgical manufacturing with a new 10,000-tonne aluminium extrusion press at Nagpur. The project is intended to manufacture large, high-strength precision aluminium alloy extrusions for defence and aerospace applications.

India Optel Expands Into Advanced Electro-Optical Manufacturing

India Optel Limited has strengthened its position in advanced optical and electro-optical systems.

The company reported a net profit of approximately ₹294.73 crore in FY2024-25 and has expanded its role beyond traditional ordnance factory production.

India Optel has entered into collaboration with Safran Electronics & Defense to manufacture the SIGMA 30N Digital Ring Laser Gyro Inertial Navigation System and the CM3-MR Direct Firing Sight in India.

Under the arrangement, India Optel will undertake manufacturing, final assembly, testing, quality control and life-cycle support.

The collaboration reflects a wider shift among the new DPSUs towards more advanced technology manufacturing and system integration.

AWEIL and AVNL Strengthen Major Defence Programmes

Advanced Weapons and Equipment India Limited and Armoured Vehicles Nigam Limited have also moved deeper into large indigenous defence programmes.

AWEIL received a ₹1,752.13 crore contract for 463 indigenously manufactured 12.7 mm Stabilised Remote Control Guns for the Indian Navy and Indian Coast Guard, with indigenous content exceeding 85 per cent.

AVNL received a contract for 693 armament upgrades of BMP-2 infantry combat vehicles to the BMP-2M configuration.

These orders have helped move the corporatised companies towards larger programme-based production rather than dependence only on inherited factory workloads.

Miniratna Status Reflects Growing Corporate Maturity

Four of the seven companies have already achieved Miniratna Category-I status.

Munitions India Limited, Armoured Vehicles Nigam Limited and India Optel Limited received the designation in May 2025, while Yantra India Limited followed in February 2026.

Miniratna status gives qualifying public-sector companies greater financial and operational autonomy within prescribed limits.

The grants reflect the government’s assessment that these companies have developed sufficient financial strength and management performance to operate with greater independence.

R&D Investment Becomes the Next Stage of Transformation

The next phase of the restructuring is increasingly focused on research, technology development and capital investment.

The Ministry of Defence has stated that the seven new DPSUs together plan to invest more than ₹3,000 crore in research and development over five years.

That shift is important because the former ordnance factory system was largely structured around production against established designs and service requirements.

The corporatised companies are now being pushed towards product development, indigenisation, export competitiveness and technology partnerships.

New DPSUs Become Part of a Larger Defence Manufacturing Expansion

The improvement in the former OFB companies has taken place during a broader expansion of India’s defence public-sector industry.

Across all 16 Defence Public Sector Undertakings, turnover reached ₹1.29 lakh crore in FY2025-26, up 15.4 per cent from the previous year. Cumulative profit after tax reached ₹23,136 crore, while DPSU exports increased by 151.2 per cent.

India’s overall defence production reached a record ₹1.78 lakh crore in FY2025-26, with public-sector entities accounting for approximately 76 per cent of total output.

The seven companies created from the OFB are therefore becoming an increasingly important part of India’s wider defence manufacturing growth.

Five Years On, the New Structure Is Taking Shape

The corporatisation of the Ordnance Factory Board was one of the most significant structural changes in India’s defence manufacturing system.

Five years later, official data points to higher production, stronger exports and profitability across most of the new companies, although performance remains uneven across all seven.

More importantly, the new DPSUs are moving beyond their inherited factory roles through advanced manufacturing, technology partnerships, export activity and planned R&D investment.

The former ordnance factory network has entered a more commercially accountable and technology-focused phase, giving India a stronger platform for expanding indigenous defence production in the years ahead.

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References

Press Information Bureau, Ministry of Defence — Performance of corporatised OFB entities and Yantra India Limited, June 19, 2026.

https://www.pib.gov.in

Press Information Bureau, Ministry of Heavy Industries — Public Enterprises Survey 2024-25 profitability data, March 10, 2026.

https://www.pib.gov.in

Press Information Bureau, Ministry of Defence — Miniratna status for Munitions India Limited, Armoured Vehicles Nigam Limited and India Optel Limited, May 29, 2025.

https://www.pib.gov.in

Press Information Bureau, Ministry of Defence — Miniratna Category-I status for Yantra India Limited, February 2, 2026.

https://www.pib.gov.in

Department of Defence Production — Annual Report 2024-25.

https://www.ddpmod.gov.in

Press Information Bureau, Ministry of Defence — Annual performance review of Defence Public Sector Undertakings, August 31 and September 1, 2026.

https://www.pib.gov.in

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