Avadi’s defence factories stopped being government departments on 1 October 2021, when the tank and engine plants became part of Armoured Vehicles Nigam Limited, headquartered on HVF Road. Five years on, the company’s own filings show what they make, what they earn and how much work is booked.
The numbers
Armoured Vehicles Nigam Limited (AVNL), the government company that runs the Heavy Vehicles Factory and Engine Factory at Avadi, had orders worth about ₹34,150 crore on 1 November 2024, roughly seven times its 2023-24 income, according to a December 2024 rating report by CARE Ratings. Its operating income that year was ₹4,682.31 crore, down about 7% because tank parts were hard to get from Russia.
For Avadi, which grew around these plants from the 1960s, the shift from government department to company changed the employer on the gate, not the work inside. The factories still build and overhaul India’s tanks and their engines, and the Army still buys almost all of it.
From Ordnance Factory Board to AVNL
AVNL was incorporated on 14 August 2021 as a wholly owned Government of India company and began operating on 1 October 2021, when the old Ordnance Factory Board’s units were split among new defence public sector undertakings. Its 2023-24 annual report gives its registered office as HVF Road, Bhaktavatsalapuram, Avadi, its workforce as 10,872 and its paid-up capital as ₹13,110.29 crore. Two of its five plants are in Avadi; the others are at Jabalpur, Medak and Ambernath.
| AVNL unit | Founded | Main products |
|---|---|---|
| Heavy Vehicles Factory, Avadi | 1961 | T-72 Ajeya, T-90 Bhishma, Arjun tanks, bridge layer tank, overhauls |
| Engine Factory, Avadi | 1987 | V46 (T-72), V92S2 (T-90) and UTD20 (BMP-II) engines, overhauls |
| Vehicle Factory, Jabalpur | 1969 | Stallion and LPTA trucks, mine-protected vehicles |
| Ordnance Factory, Medak | 1984 | BMP-II Sarath and variants, CRN-91 naval gun |
| Machine Tool Prototype Factory, Ambernath | 1953 | Gearboxes, fuzes, KAVACH decoy launcher |
Source: Armoured Vehicles Nigam Limited, Annual Report 2023-24
The Engine Factory occupies 72 acres about 7 km from Avadi railway station, its official unit page says. A third Avadi plant, the Ordnance Clothing Factory, set up on 10 November 1961, is not part of AVNL; its unit page places it in the Ordnance Equipment Group headquartered at Kanpur, on 70 hectares of which 26 are factory and 44 estate.
What the money looks like
| Year | Operating income (₹ cr) | PBILDT (₹ cr) | Profit after tax (₹ cr) |
|---|---|---|---|
| 2022-23 | 5,057.44 | 211.18 | 270.17 |
| 2023-24 | 4,682.31 | 443.89 | 605.07 |
| Apr-Sep 2024 (unaudited) | 1,235.72 | −90.47 | – |
Source: CARE Ratings, rating rationale for Armoured Vehicles Nigam Limited, December 2024
The 2023-24 profit flatters the year. CARE notes that operating profit included a ₹389 crore reversal of a provision for liquidated damages, the penalties for late delivery. Without it, operating profit would have been close to the previous year’s. The first half of 2024-25 showed an operating loss. The statutory auditor qualified the 2023-24 accounts over weak internal financial controls in some areas.
Share of AVNL’s 2023-24 turnover that came from the Indian Army, according to the CARE rating report.
The orders behind the book
The best-known Avadi order is for the Arjun Mk-1A. On 23 September 2021 the defence ministry ordered 118 of them from HVF Avadi for ₹7,523 crore, according to the PIB release reproduced in a DRDO news compendium. The ministry said the tank had 72 new features over the Mk-1, that indigenous content rose from 41% to 54.3%, and that the order would involve more than 200 Indian vendors, including small firms, and employ about 8,000 people. The tank was designed by DRDO’s Combat Vehicles Research and Development Establishment, which is also in Avadi.
The annual report also lists an order worth ₹6,089.53 crore to upgrade 693 BMP-II infantry combat vehicles, a KAVACH decoy launcher contract with the Navy and ten CRN-91 guns for the Coast Guard. Some of this work is done outside Tamil Nadu, at Medak and Ambernath, and the filings do not split income or orders by plant.
It’s often said the Avadi factories are still run by the Ordnance Factory Board.
The record shows Since 1 October 2021 HVF and the Engine Factory have been units of AVNL, a company under the Companies Act. Their staff were placed on deemed deputation from the defence ministry, and pension and gratuity costs stay with the government, CARE notes.
The risks in the filings
Three stand out. Dependence on Russian parts for the T-72 and T-90 lines cut 2023-24 income. Almost all revenue comes from one customer, the Army, so the company’s fortunes move with defence procurement. And CARE lists a fall in the government’s stake below 51% or weaker government support as a trigger for a downgrade. Exports are small: the annual report mentions a budgetary quote for BMP-II spares to Egypt and trade-show displays, but no export order values.
The company’s balance sheet still carries the transition. Its 2023-24 annual general meeting notice proposed issuing up to 14,35,11,845 equity shares of ₹10 each, about ₹143.51 crore, to the President of India in lieu of an adjusted net asset value, rather than for cash. That points to the government still settling the value of assets it moved from the old factories into the company. CARE also says a sustained cut in gross current asset days below 200, meaning less money tied up in inventory and dues, would count in AVNL’s favour.
The town around the plants
Avadi is now itself a city corporation, and the state’s 2024-25 municipal policy note lists ₹59.92 crore of water supply improvement and ₹98.59 crore of underground sewerage extension for it under the Tamil Nadu Climate Resilient Urban Development Project. The factory estates, such as the Ordnance Clothing Factory’s 44-hectare estate, sit inside a growing civic area that depends on those works.
What this means for you
- For notices about HVF and the Engine Factory, look to AVNL; the Ordnance Factory Board is no longer their parent.
- Local firms hoping to supply the Avadi plants deal with AVNL; the Arjun order alone was said to involve more than 200 Indian vendors.
- AVNL’s annual reports are on its website and give the clearest public picture of what the Avadi plants make.
- The Ordnance Clothing Factory is a separate organisation; queries about it go through the Ordnance Equipment Group, not AVNL.
What to watch
By 2028-29
Execution of AVNL’s ₹34,150 crore order book, which CARE expected to run to about 2028-29.
Pending
Deliveries of the 118 Arjun Mk-1A tanks from HVF Avadi, which the company’s next annual reports should track.
Checked against official sources on 23 October 2026. Figures and rules change; confirm on the linked official pages before relying on them.
Sources
- Annual Report 2023-24, Armoured Vehicles Nigam Limited
- Rating rationale, Armoured Vehicles Nigam Limited, CARE Ratings, December 2024
- DRDO news compendium, 24 September 2021 (includes PIB release on 118 Arjun Mk-1A tanks, PRID 1757320)
- Engine Factory Avadi, unit page, Directorate of Defence Production and Ordnance (ddpdoo.gov.in)
- Ordnance Clothing Factory Avadi, unit page, ddpdoo.gov.in
- Policy Note 2024-25, Municipal Administration and Water Supply Department, Government of Tamil Nadu
