Raymond enters the EV, military, and aerospace components industries and plans to pay Rs 682 crore for a share in Maini Precision

 Raymond enters the EV, military, and aerospace components industries and plans to pay Rs 682 crore for a share in Maini Precision

According to the firm, the purchase would enhance Raymond's current engineering business by providing it with a complementary business that operates in the emerging fields of defense, electric vehicles (EVs), and aerospace.

On November 3, the Raymond Group announced that it is paying Rs 682 crore, which is a combination of debt and internal accruals, to acquire 59.25 percent of the automotive and aerospace company Maini Precision Products Limited (MPPL).

According to the firm, the purchase would enhance Raymond's current engineering business by providing it with a complementary business that operates in the emerging fields of defense, electric vehicles (EVs), and aerospace.

Ring Plus Aqua Limited (RPAL), a JK Files and Engineering company, will carry out the transaction. Raymond plans to create a new subsidiary by consolidating the JK Files, RPAL, and MPPL businesses after the purchase. The new business, called newco, would be primarily focused on precision engineering goods, with 66.3 percent owned by Raymond Ltd.

As of FY23, Newco's pro-forma consolidated revenue was Rs 1600 crore, with an EBIDTA of Rs 220 crore. The MPPL founder Gautam Maini will oversee the combined engineering division. According to the corporation, the combined business serves the leading global OEMs and Tier 1 manufacturers in the automotive, aerospace, military, and industrial sectors.

"This purchase will propel our engineering business's growth and create new avenues for our entry into quickly expanding markets including aerospace, defense, and electric vehicles.These are rapidly expanding industries that provide us plenty of room to develop, according to Gautam Hari Singhania, Chairman & Managing Director of Raymond.

With 11 manufacturing locations in India, MPPL is a diversified company that operates in two verticals: aerospace, which produces precision products for the aerospace and defense industry, and automotive and industrial, which produces precision products for clean internal combustion engines, fuel injections and transmissions, electric vehicle components, hydraulics, industrial, and agricultural applications.

In FY23, MPPL earned around Rs 750 crore in total revenue with a 13% EBITDA margin, contributing 70% to exports.

The acquisition is anticipated to close within the current fiscal year, pending the necessary regulatory clearances.