Tata Power scrip’s rise anticipates major army order for night vision devices

By Ajai Shukla

Business Standard, 5th May 16

The Tata Power scrip perplexed industry analysts on Tuesday by jumping over four per cent on the Bombay Stock Exchange (BSE). This came a day after the company announced it had won a small order from the Border Security Force (BSF) for “cooled hand held thermal imagers” (HHTIs) that troopers on border outposts will use to watch over the border fence, both by day and night.

The order for just 40 units won by the company’s strategic engineering division (Tata Power SED) --- worth barely Rs 20 crore, at about Rs 50 lakhs per piece --- hardly explains such euphoria (stock market gains were pared slightly on Wednesday). Nor does an anticipated follow-on order for about 400 more HHTIs, worth Rs 150-200 crore, which that the home ministry is processing and is likely to clear by July, say ministry sources.

Business Standard learns that the optimism stems from the company’s leap into pole position in the race for the much larger army requirement of 4,000 HHTIs, worth Rs 1,500-2,000 crore, for surveillance of the 776-kilometre line of control (LoC) with Pakistan. Additionally, the army needs HHTIs to enable its heavy armoured vehicles to drive at night without lights.

Army sources say the HHTIs chosen by the BSF are superior to, and significantly cheaper than, the equipment it has been evaluating since 2010. The department of defence production (DDP) has been pushing the army to buy the HHTI offered by the Defence R&D Organisation (DRDO), and built by Bharat Electronics Ltd (BEL) --- both defence ministry entities that work under the DDP.

The DRDO-BEL devices use Israeli infra-red (IR) tubes, with a 320 x 280 format, and a 20 um pixel pitch. In comparison, the Tata Power device, which the BSF has selected, uses a 640 x 480 format, with a 15 um pixel pitch. Like common digital cameras, a smaller pixel size enables more detailed information to be packed into the same size of photograph.

Given this advantage, and standing instructions to support “Make in India”, and the army’s inherent need for life-cycle support for its HHTI devices, the generals are veering around towards Tata Power’s product.

A cooled HHTI consists of two viewing devices: an optical daytime sight, and an IR sight for nighttime. Complex, on-board data fusion software amalgamates the images received from both sights for greater clarity. In addition, there is an inbuilt radio transmitter that transmits the final image, in real time, from the border fence where the HHTI is often installed to a command post that could be several kilometres away.

Tata Power SED sources say their breakthrough stems from indigenising the data fusion algorithm, obtaining sharper, clearer images of the surveillance area.

In the BSF trials, Tata Power competed against two other offerings. One, by a highly-regarded Indian imaging start-up called Tonbo Imaging, also provided high-quality images but failed out on the radio equipment needed to transmit it. The other competitor, BEL, provided adequate radio equipment, since it builds most of the army’s requirement of radios, but its HHTI failed to develop a passable image.

A major gap in indigenizing cooled HHTIs exists in thermal imaging IR tubes, which Indian companies all import. Tata Power’s HHTIs incorporate IR tubes from French company, Sofradir. However, company sources indicate that, if it wins the large army order, there will be a compelling business case for a joint venture with Sofradir to manufacture IR tubes in India.

The army has been seeking to mitigate its “night blindness” with two types of sensors: first, thermal-imaging (TI) devices, which create an image of a target using a temperature gradient. The second type are image intensification (II) devices, which magnify ambient light, which is invariably available in tiny amounts at night, e.g. from stars.

Earlier, “active infra-red devices” were used, which flashed out an IR beam and viewed the target from the reflected IR light. Active devices are now obsolescent, since they give away one’s own position.