Raymond Dives into Aerospace, Defense, and EV Sectors with a Whopping Rs 682 Crore Purchase
Raymond Group is buying 59.25 percent of Maini Precision Products Limited (MPPL) for Rs 682 crore. MPPL makes products for aerospace, electric vehicles, and defense. Raymond will pay with debt and its own money.
“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, EV…These are growing sectors with visible momentum presenting us with ample opportunities to leverage,” said Gautam Hari Singhania, Chairman & Managing Director, Raymond.
The new company will have a revenue of Rs 1600 crore and an EBIDTA of Rs 220 crore in FY23. Gautam Maini, the founder of MPPL, will lead the new company. The new company will serve global customers in aerospace, defense, auto and industrial sectors.
Gautam Hari Singhania, the boss of Raymond, said this deal will boost the growth of its engineering business. He said aerospace, defense, and electric vehicles are sectors with a lot of potential. MPPL has two businesses: aerospace and automotive/industrial. It makes products for aerospace and defense, as well as for engines, transmissions, electric vehicles, hydraulics, and agriculture. It has 11 factories in India.
“I am delighted to lead Raymond’s consolidated engineering business. 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,” Gautam Maini said.
MPPL gets 70 percent of its revenue from exports. It made Rs 750 crore in FY23 with 13 percent EBITDA margin. The deal needs approval from regulators. It is expected to be done in this financial year.
Raymond has been changing its business in the last few years. It has entered new businesses and sold some old ones. It sold its consumer care business to Godrej. It separated its lifestyle business. It also started a real estate business.
“With strong free cash generation and no major capex requirement, Raymond group will remain net cash positive post the transaction,” said Raymond.
Shares of Raymomd rose over 4 percent to Rs 1,888.20 on BSE following the announcement.