Raymond expands engineering portfolio with MPPL stake acquisition for Rs 682 cr

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Raymond expands engineering portfolio with MPPL stake acquisition for Rs 682 cr

Raymond expands engineering portfolio with MPPL stake acquisition for Rs 682 cr

Industry News
Nov 03,23

MPPL operates in high-growth sectors such as Aerospace, Electric Vehicles (EV), and Defense. The acquisition will be executed through Ring Plus Aqua Limited (RPAL).

Raymond expands engineering portfolio with MPPL stake acquisition for Rs 682 cr

On November 3, the Raymond Group announced its acquisition of a 59.25% stake in Maini Precision Products Limited (MPPL), a leading player in the auto and aerospace industry, for Rs 682 crore. The funding for this acquisition will come from a combination of debt and internal accruals.

This strategic move aims to bolster Raymond's existing engineering business by integrating it with MPPL's expertise. MPPL operates in high-growth sectors such as Aerospace, Electric Vehicles (EV), and Defense. The acquisition will be executed through Ring Plus Aqua Limited (RPAL), a subsidiary of JK Files and Engineering. Following the transaction, Raymond will consolidate JK Files, RPAL, and MPPL to create a new subsidiary. Raymond Ltd. will own a 66.3 percent stake in the new company, which will focus on precision engineering products.

The consolidated revenue of the new entity, referred to as Newco, for the fiscal year 2023 stands at Rs 1600 crore, with an EBIDTA of Rs 220 crore. Gautam Maini, the founder of MPPL, will lead the unified Engineering business, catering to top Global Original Equipment Manufacturers (OEMs) and Tier 1 manufacturers in aerospace, defence, auto, and industrial sectors.

Gautam Hari Singhania, Chairman & Managing Director of Raymond, expressed enthusiasm about the acquisition, stating that it will accelerate the growth of their Engineering business and open doors to burgeoning sectors such as Aerospace, Defense, and EV. MPPL, with its 11 manufacturing facilities in India, operates in aerospace, automotive, and industrial verticals. In the fiscal year 2023, MPPL, with a 70% export contribution, achieved total revenue of Rs 750 crore, boasting a 13% EBITDA margin.

The completion of this transaction is contingent on regulatory approvals and is anticipated to be finalized within the current fiscal year. This move aligns with Raymond's ongoing efforts to restructure its business and explore new avenues, following previous divestments and forays into sectors like real estate.

Source: Moneycontrol