I wouldn't be as harsh to call them a scam. In mid 2000s some major Indian companies acquired licence to manufacture small arms with big names such as l&t.
All of them let go of the licenses because of beureaucratic hassles of making and proofing small arms.
This is a low profit, high entry price segment with no guarantee of orders and an ab initio design takes half a decade to mature. The only client they have is the government, which is a fickle and corrupt buyer.
At least SSS defence has shown some initiative in designs. As of now they are the only Indian firm to launch their own designs. It took them a massive effort just to build their own test range. Who will sink dozens of crores in such a business with zero assurance of orders?
Look at IA. They have changed their requirements 4 times in a decade from 5.56x45 to 5.56x45+7.62x39 multi cal to back to 5.56x45 to 7.62x51 & 5.56x45 to now three tiers in 7.62x51, 7.62x39 and 5.56x45.
SSS defence at least has a design in P72 in all three calibre, even if it is vapourware at this point. They have sunk capital in ammunition manufacturing as well.
No one, not PLR, not Tata, not L&T, not Kalyani have touched the design aspects with a 10 feet pole. All these companies would spend more on air-conditioning for their offices than the entire turnover of SSS defence several times over.