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Raymond Group has acquired 59.25 per cent stake in Maini Precision Products Limited (MPPL) for ₹682 crores funded by a mix of debt and internal accruals.
“This acquisition is a strategic move to further strengthen Raymond’s existing engineering business with a complementing business that has presence in the sunrise sectors of Aerospace, Electric Vehicles (EV) and Defense. The consolidated business caters to the top Global OEMs and Tier 1 manufacturers across aerospace, defense, auto and industrial businesses,” the company said in a statement.
The acquisition will be concluded through Ring Plus Aqua Limited (RPAL), a subsidiary of JK Files and Engineering Ltd (JK Files). Post the acquisition, Raymond will consolidate JK Files, RPAL and MPPL business and will form a new subsidiary. Raymond Ltd. will hold 66.3 per cent in the new company that will focus on precision engineering products. The proforma consolidated revenue of the new entity as of FY23 are ₹1600 crore with an EBIDTA ~ ₹220 crore.
Gautam Hari Singhania, Chairman & Managing Director, Raymond Limited said, “This 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, Defense, and Electric Vehicles (EV). Raymond Group has always believed in the ‘Make in India’ initiative and this acquisition will also provide an impetus to China Plus One strategy that has been benefitting us. These are growing sectors with visible momentum presenting us with ample opportunities to leverage. I am pleased to welcome Gautam Maini, founder of MPPL to the leadership team of our engineering business and we will significantly benefit from his domain expertise and his vast experience.”
MPPL has a diversified business with 11 manufacturing facilities in India across two verticals i.e., aerospace, which comprises precision products manufactured for aerospace and defense, and automotive and industrial, that comprises precision products for clean internal combustion engines, fuel injections and transmissions, EV components, hydraulics and industrial as well as agriculture. MPPL has a 70 per cent export contribution and generated around ₹750 crore in total revenue in FY23 with 13 per cent EBITDA margin.
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Commenting on the development, Gautam Maini said “I am delighted to lead Raymond’s consolidated Engineering Business. 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.”
The acquisition is part of a transformation journey under which Raymond has sold the FMCG business, demerged the Lifestyle Business and shaping the scalable Real Estate Business. With this acquisition aimed at growing the Engineering business significantly, Raymond Group has reiterated its intent that it will continue to have three distinct vectors of growth.
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