Raymond's acquisition of the Maini group

Raymond Group, a prominent player in the textile and apparel industry, recently made a strategic move by acquiring a substantial 59.2 per cent stake in Maini Precision Products (MPPL) for Rs 682 crore. This significant acquisition was financed through a combination of debt and internal accruals. The company will raise Rs 342 crore from external sources to complete the acquisition.

Details of the acquisition

This transaction is expected to be completed by FY24, subject to approvals. MPPL will then be consolidated with JK Files and Ring Plus Aqua to form 'Newco'. Raymond will hold a majority stake of 66.3 per cent in Newco.

About the Maini group

The Maini group offers end-to-end solutions in the precision engineering segment. They primarily cater to two major sectors: aerospace and automotive. They manufacture engine components, structure components, hydraulics, power tools, and more. In FY23, the company recorded a revenue of around Rs 750 crore, of which the automotive segment contributed 77 per cent. Further, 70 per cent of total revenue was generated from export operations.

Strategic rationale behind the acquisition

Raymond's decision to acquire Maini Group is part of its broader strategy to grow its engineering business, and this acquisition will play a major role in that. By leveraging the 'Make in India' initiative, Raymond aims to tap into the burgeoning potential of the engineering and aerospace industries.

The companies under the 'Newco' umbrella will be its key to achieving that. The newly formed entity has ported a consolidated proforma-revenue of Rs 1,600 crore and an EBITDA of Rs 220 crore as of FY23, and the management targets to grow this business at over 20 per cent per annum in the next four years.

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