Raymond to acquire Maini Precision for ₹682 crore

Billionaire Gautam Singhania-promoted Raymond Group, on Friday, announced that it will acquire a 59.25% stake in Maini Precision Products Ltd (MPPL) for ₹682 crore.

“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),” said Gautam Hari Singhania, chairman and MD, Raymond Ltd.

The acquisition, which will diversify Raymond group from its core fabric and realty businesses, will be funded by a mix of debt and internal accruals, according to an exchange filing.

MPPL is engaged in manufacturing precision engineering products for aerospace, EV, and defence sectors, with 11 manufacturing facilities in India, which generated about ₹750 crore in revenues in FY23.

As a plan, Raymond will consolidate its existing engineering and automotive components businesses under JK Files & Engineering Ltd and Ring Plus Aqua Ltd (RPAL), with MPPL, in order to form a new subsidiary called “Newco”.

In Newco, while Raymond will hold 66.3%, RPAL will hold 5.2% and MPPL Group will hold 28.5%.

The proforma consolidated revenue of Newco as of FY23 is estimated to be around ₹1,600 crore with an operating income of around ₹220 crore, according to the filing.

“Post transaction, Raymond group to remain net cash surplus,” said the company.

The acquisition of MPPL is likely to be closed during the current fiscal, subject to requisite regulatory approvals.

The planned consolidation of businesses will serve global original equipment manufacturers (OEMs) across aerospace, defence, auto and industrial businesses.

“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,” said Singhania.

MPPL’s founder Gautam Maini will join the leadership team of Raymond’s engineering business post the acquisition, said Singhania.

InCredMAPE, the investment banking arm of InCred Capital, was the exclusive M&A advisor on the strategic transaction of Raymond Group and aerospace player Maini Precision Products.

On Friday, Shares of Raymond Ltd closed 3.2% higher at ₹1872.45 apiece on the NSE.