India's textile firm Raymond bolsters engineering unit with $82-mln deal (updated)

Raymond

03/11/2023 08:54

(Adds details on deal, CEO comment, shares)
       BENGALURU, Nov 3 (Reuters) - Indian textiles maker
Raymond  RYMD.NS  on Friday said it will buy a majority stake in
automotive firm Maini Precision Products Limited (MMPL)
 MAPI.NS  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  GOCP.NS  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)
 ((Indranil.Sarkar@thomsonreuters.com; Mobile:  +91
7022132226;))