Raymond To Acquire 59.25% Stake In MPPL To Foray Into Aerospace, Defense & EV Components Biz, Stock Rises

Raymond shares traded 2.28% higher on Friday at Rs 1,856 per share after the company announced its decision to foray into sunrise sectors of the Aerospace, Defense, and EV components business. In an exchange filing on Friday, the Raymond Group announced the acquisition of a 59.25% stake in Maini Precision Products Limited (MPPL) for Rs 682 crores funded by a mix of debt and internal accruals.

This acquisition is seen as a strategic move to further strengthen Raymond's existing engineering business with a complementing business that has a presence in the sunrise sectors of Aerospace, Electric Vehicles (EV), and Defense. 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.

Raymond's future plans:

Following the acquisition, Raymond will consolidate JK Files, RPAL, and MPPL business and will form a new subsidiary ("Newco"). Raymond Ltd. will hold 66.3% in the "Newco" that will focus on precision engineering products. The proforma consolidated revenue of "Newco" as of FY23 stood at ~ Rs 1600 crore with an EBIDTA of approximately Rs 220 crore.