Raymond Forays Into EV Components Biz, Picks Stake In MPPL

Raymond Group on Friday announced its foray into aerospace, defence and electric vehicles (EV) components business and acquired 59.25 per cent stake worth INR 682 crore in Maini Precision Products Limited (MPPL).

Raymond expects the transaction to be completed in the ongoing financial year, the company said in a stock exchange filing. The acquisition will be funded by a mix of debt and internal accruals. The group will remain net cash positive after the acquisition, it said.

According to the company, it expects this acquisition to strengthen its existing engineering business. The consolidated business caters to the top Global OEMs and Tier 1 manufacturers across aerospace, defence, auto and industrial businesses. 

“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,” said Gautam Hari Singhania, Chairman & Managing Director, Raymond Limited.

Raymond’s MPPL acquisition will be concluded through Ring Plus Aqua Limited, an arm of JK Files and Engineering Limited. The group will consolidate JK Files, RPAL and MPPL business to form a new subsidiary, in which Raymond will hold 66.3 per cent stake. The new arm will focus on precision engineering products.

“This strategic merger represents the harmonious integration of our diverse strengths, thus creating a platform for synergistic collaboration. Leveraging our core competencies, this partnership will usher in myriad opportunities for rapid growth and expansion, affording us a competitive edge in both international and domestic markets,” said Gautam Maini, founder, MPPL said.

Raymond has a significant presence in the textile and apparel sector and diverse segments such as consumer care, realty, and engineering in national and international markets.

EV Market In India

The Indian automobile industry is the fifth largest in the world and is expected to become the third largest by 2030. As per India Energy Storage Alliance (IESA), the Indian EV industry is expected to expand at a CAGR of 36 per cent. As population rises and demand for vehicles grow, dependence on conventional energy resources is not a sustainable option as India imports close to 80 per cent of its crude oil requirements. NITI Aayog aims to achieve EV sales penetration of 70 per cent for all commercial cars, 30 per cent for private cars, 40 per cent for buses and 80 per cent for two and three-wheelers by 2030.

This is in line with the goal to achieve net zero carbon emission by 2070. Over the last three years, 0.52 million EVs were registered in India, according to the Ministry of Heavy Industries. EVs recorded robust growth in 2021, supported by the implementation of favourable policies and programmes by the government.