Raymond Group enters into aerospace and EV with the acquisition of Maini Precision Products

Raymond Group has announced that it has acquired a 59.25 percent stake in Maini Precision Products Limited (MPPL) for Rs 682 crore. A combination of debt and internal accruals funded the acquisition. This strategic move is intended to further strengthen Raymond's existing engineering business by adding a complementary company with a presence in the emerging sectors of Aerospace, Electric Vehicles (EV), and Defence.

The consolidated business caters to the top Global OEMs and Tier 1 manufacturers across aerospace, defense, auto, and industrial businesses. With this acquisition, Raymond's engineering business will emerge as a large-scale provider of Engineering, Automotive, EV, Aerospace, and defense components, distinctly positioned to target high-growth precision engineering products with a significant presence across international and domestic markets.

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 ('Newco'). Raymond Ltd. will hold 66.3 percent in the 'Newco' that will focus on precision engineering products. The proforma consolidated revenue of 'Newco' as of FY23 is Rs 1600 crore with an EBITDA of Rs 220 crore. Commenting on the development, 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, Defence, 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, giving us 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 is a diversified business with 11 manufacturing facilities in India. It operates in two verticals: aerospace and automotive/industrial. The aerospace vertical produces precision products for aerospace and defense, while the automotive/industrial vertical manufactures precision products for clean internal combustion engines, fuel injections, transmissions, EV components, hydraulics, and industrial and agricultural sectors. MPPL has a 70% export contribution and generated around 750 crore in total revenue in FY23, with a 13% EBITDA margin.