Raymond enters aerospace sector to bolster engg biz
New Delhi, November 3
Raymond Group on Friday said it will acquire a 59.25% stake in Maini Precision Products Ltd for Rs 682 crore to further strengthen its existing engineering business.
Deal dynamics
- The acquisition will be concluded through Ring Plus Aqua Ltd (RPAL), a subsidiary of JK Files and Engineering Ltd
- Post the acquisition, the company will consolidate JK Files, RPAL and MPPL business and will form a new subsidiary, Newco
- Raymond will hold 66.3% in Newco that will focus on precision engineering products
Maini Precision Products Ltd (MPPL) has a presence in aerospace, electric vehicles (EV) and defence. The acquisition is being funded by a mix of debt and internal accruals, Raymond Ltd said in a regulatory filing.
“This acquisition is a strategic move to further strengthen Raymond’s existing engineering business with a complementing business that has a presence in the sunrise sectors of aerospace, electric vehicles (EV) and defence. The consolidated business caters to the top global OEMs (Original Equipment Manufacturers) and Tier 1 manufacturers across aerospace, defence, auto and industrial businesses,” it added.
Further, Raymond said the acquisition will be concluded through Ring Plus Aqua Ltd (RPAL), a subsidiary of JK Files and Engineering Ltd (JK Files).
Post the acquisition, the company will consolidate JK Files, RPAL and MPPL business and will form a new subsidiary, Newco. Raymond will hold 66.3% in ‘Newco’ that will focus on precision engineering products. The proforma consolidated revenue of ‘Newco’ as of FY23 is around Rs 1,600 crore with an EBITDA of Rs 220 crore, it added.
Gautam Maini, the founder of MPPL, will lead the consolidated engineering business.
“The acquisition will catapult the growth of our engineering business and will open new vistas to us for our foray into rapidly growing segments like aerospace, defence and EVs,” Raymond Ltd chairman and managing director Gautam Hari Singhania said.
He said, “These are growing sectors with visible momentum presenting us with ample opportunities to leverage.”
