Raymond Group to acquire 59.25% stake in Maini Precision Products for Rs 682 crore

Post the acquisition, the company will consolidate JK Files, RPAL and MPPL business and will form a new subsidiary, Newco. Raymond Ltd will hold 66.3% in 'Newco' that will focus on precision engineering products.

New Delhi: Raymond Group on Friday said it will acquire a 59.25 per cent stake in Maini Precision Products Ltd for Rs 682 crore to further strengthen its existing engineering business.

Maini Precision Products Ltd (MPPL) has a presence in aerospace, electric vehicles 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 Ltd will hold 66.3 per cent 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 added, "These are growing sectors with visible momentum presenting us with ample opportunities to leverage."

The transaction will be subject to requisite regulatory approvals and is expected to be completed during the current fiscal.

MPPL has a diversified business with 11 manufacturing facilities in India across two verticals -- aerospace, which comprises precision products manufactured for aerospace and defence, and automotive and industrial, which comprises precision products for clean internal combustion engines, fuel injections and transmissions, EV components, hydraulics and industrial as well as agriculture.

The company has a 70 per cent export contribution and generated around Rs 750 crore in total revenue in FY23 with a 13 per cent EBITDA margin, the filing said.

"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 said.