Raymond Group on Friday mentioned it’s buying a 59.25 per cent stake in Maini Precision Products Ltd (MPPL) for Rs 682 crore. MPPL has a presence in aerospace, electrical autos and defence. The acquisition is being funded by a mixture of debt and inside accruals, in line with a regulatory submitting.
“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,” Raymond mentioned in the submitting.
Further, Raymond mentioned the acquisition shall be concluded by means of Ring Plus Aqua Ltd (RPAL), a subsidiary of JK Files and Engineering Ltd (JK Files).
After the acquisition, the corporate will consolidate JK Files, RPAL and MPPL enterprise and will type a brand new subsidiary, Newco. Raymond Ltd will maintain 66.3 per cent in ‘Newco’ that can concentrate on precision engineering merchandise. The proforma consolidated income of ‘Newco’ as of FY23 is round Rs 1,600 crore with an EBITDA of Rs 220 crore, it added. Gautam Maini, the founding father of MPPL, will lead the consolidated engineering enterprise.
Raymond Ltd Chairman and Managing Director Gautam Hari Singhania mentioned, “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… These are growing sectors with visible momentum presenting us with ample opportunities to leverage.”
The transaction shall be topic to requisite regulatory approvals and is predicted to be accomplished in the course of the present fiscal.
MPPL has a diversified enterprise with 11 manufacturing amenities in India throughout two verticals — aerospace, which includes precision merchandise manufactured for aerospace and defence, and automotive and industrial, which includes precision merchandise for clear inside combustion engines, gasoline injections and transmissions, EV elements, hydraulics and industrial in addition to agriculture.
The firm has a 70 per cent export contribution and generated round Rs 750 crore in complete income in FY23 with a 13 per cent EBITDA margin, the submitting mentioned.
“This strategic merger represents the harmonious integration of our diverse strengths, thus creating a platform for synergistic collaboration. Leveraging our core competencies, this partnership will usher in myriad opportunities for rapid growth and expansion, affording us a competitive edge in both international and domestic markets,” Maini mentioned.
(With PTI Inputs)
