Raymond’s Horizon Expands with Maini Precision Products

Raymond and Maini Precision Products Acquisition

In a recent announcement, Raymond Group has unveiled plans to acquire a significant 59.25% stake in Maini Precision Products (MMP) at a cost of Rs 682 crore. This strategic move will be financed through a blend of debt and internal resources. The aim of this acquisition is to reinforce Raymond’s existing engineering business and venture into sectors like aerospace, electric vehicles (EV), and defense. In this article, we’ll delve into the specifics of this acquisition and its potential ramifications.

Empowering Raymond’s Engineering Business:

Raymond’s decision to purchase the majority stake in Maini Precision Products is a calculated step. The objective is to fortify its engineering division by integrating it with MMP, which holds a strong presence in industries such as aerospace, EVs, and defense. This collaboration is set to create fresh opportunities and enhance Raymond’s standing in these swiftly expanding sectors.

Ring Plus Aqua: The Vehicle for Acquisition:

The acquisition of MMP will be facilitated through Ring Plus Aqua, a subsidiary of JK Files and Engineering. Following the acquisition’s conclusion, Raymond will amalgamate the operations of JK Files, RPAL, and MPP. This amalgamation will result in the formation of a subsidiary called Newco, where Raymond will retain a 66.3% stake. Newco will have a primary focus on precision engineering products.

Growth Prospects and Financial Overview:

As of the fiscal year 2023, Newco’s proforma consolidated revenue is projected to reach Rs 1,600 crore, with an Ebitda of Rs 220 crore. This signifies substantial potential for expansion and development in the precision engineering sector.

Diverse Manufacturing Facilities:

Maini Precision Products operates 11 manufacturing facilities in India, spread across two core verticals. The first vertical concentrates on aerospace, involving the production of precision components for aerospace and defense applications. The second vertical revolves around automotive and industrial products, encompassing precision components for internal combustion engines, fuel systems, transmissions, electric vehicles, hydraulics, and industrial and agricultural machinery.

A Warm Welcome for the Founder:

Gautam Hari Singhania, the chairman and managing director of Raymond, expressed his delight in extending a warm welcome to Gautam Maini, the founder of MMP, to their engineering team. Singhania firmly believes that Maini’s profound domain knowledge and extensive experience will greatly contribute to the company’s growth and prosperity.

A Strategic Vision: Maini Precision Products

Gautam Maini, the founder of Maini Precision Products, conveyed his enthusiasm for leading Raymond’s consolidated engineering division. He views this merger as a harmonious fusion of strengths that will unveil myriad opportunities for rapid expansion, granting them a competitive edge in both domestic and international markets.

InCredMAPE as the Exclusive Advisor:

InCredMAPE, the investment banking arm of InCred Capital, played a crucial role as the exclusive M&A advisor in this transaction. Their involvement underscores the significance of this strategic maneuver by Raymond Group.

Conclusion: Maini Precision Products

Raymond Group’s acquisition of Maini Precision Products signifies not just a business transaction but a well-thought-out step toward growth and diversification. This move will empower Raymond to establish a stronger foothold in the engineering, automotive, EV, aerospace, and defense sectors. By combining their core competencies, Raymond and MMP are poised to harness the emerging opportunities in these high-growth markets to the fullest.

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