BENGALURU (Reuters) -Indian textiles maker Raymond on Friday said it will buy a majority stake in automotive firm Maini Precision Products Limited (MMPL) for 6.82 billion rupees ($81.91 million), to bolster its engineering business.
Raymond will buy a 59.25% stake in MMPL, which has 11 manufacturing facilities across India in aerospace, and automotive and industrial verticals.
The deal comes months after Raymond made a shift in its core business as it sold its consumer goods segment – which included popular brands such as the Park Avenue deodorant and Kamasutra condoms – to Godrej Consumer Products for $345 million.
The Mumbai-based company had said that real estate will be its core business, along with its investments in engineering and denim.
Friday’s deal will also involve the consolidation of Raymond’s engineering units – Ring Plus Aqua Limited and JK Files and Engineering – and the newly acquired MMPL into one new subsidiary, in which the textile maker will hold a 66.3% stake.
Ring Plus Aqua, and JK Files and Engineering manufacture automotive and engineering products.
“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, Defense, and Electric Vehicles (EV),” Raymond Managing Director Gautam Hari Singhania said.
Gautam Maini, the founder of MMPL, will lead Raymond’s newly-formed engineering unit.
Raymond plans to fund the purchase through a mix of debt and internal accruals.
Shares of Raymond, which have gained over a quarter in value so far this year, was up nearly 3% post the deal announcement.
Bengaluru-based MPPL has a 70% export contribution and generated around 7.5 billion rupees in revenue in fiscal 2022-2023.
($1 = 83.2600 Indian rupees)
(Reporting by Indranil Sarkar in Bengaluru; Editing by Mrigank Dhaniwala)
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