New Delhi, Nov 3 (IANS): Raymond Group has announced the acquisition of 59.25 per cent stake in Maini Precision Products Limited (MPPL) for Rs 682 crore funded by a mix of debt and internal accruals.

This acquisition is a strategic move to further strengthen Raymond's existing engineering business with a complementing business that has presence in the sunrise 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 & Defense components, distinctly positioned to target high-growth precision engineering products with a significant presence across international as well as 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 per cent in the 'Newco' that will focus on precision engineering products. The proforma consolidated revenue of 'Newco' as of FY23 are ~ Rs 1600 crore with an EBIDTA 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 presenting us with 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 has a diversified business with 11 manufacturing facilities in India across two verticals i.e., aerospace, which comprises precision products manufactured for aerospace and defense, and automotive and industrial, that comprises precision products for clean internal combustion engines, fuel injections and transmissions, EV components, hydraulics and industrial as well as agriculture. MPPL has a 70 per cent export contribution and generated around Rs 750 crore in total revenue in FY23 with 13 per cent EBITDA margin.