Auto major Mahindra & Mahindra is in talks with European and North American companies to sell about 20% stake in its aerostructure company, a top company official said.
“We are talking to some people for selling a stake in our aerostructure company. They are offering to give us technology and want equity (in M&M’s aerostructure arm) in exchange,” Hemant Luthra, director, Mahindra Group, told HT.
Mahindra Aerostructure is a separate company, part of Mahindra Aerospace Pvt Ltd (MAPL). MAPL is also in to aerospace, and the probable stake sale would not be in MAPL but in its aerostructure arm, Luthra said.
Luthra said the company is contemplating the stake sale not because it needs money but to infuse technology, which will enhance its technical standing in the aviation sector.
That aspect got a boost on Wednesday when Mahindra Aerospace and National Aerospace Laboratories announced the successful maiden flight of their jointly-developed aircraft, the NM5 — the first Indian plane developed from scratch through public private partnership.
The 5-seater NM5’s price has not been disclosed. It is also still to get approvals from international and Indian authorities.
Industry experts say aviation firms are cautious on sharing technology, especially in aerostructure. Buying a stake ensures that the technology partner does not emerge a competitor in the future.
The group is also on the lookout to buy an unnamed Europe-based aerostructure firm with a ¤500-million turnover. A European bank is looking to exit the company. The sellers have not approached the Mahindra group, but the latter are keen."But it has not gone up to a level that we can discuss it with the board (yet)," Luthra said. Industry sources say the Mahindra group could invest ¤50-100 million in the foray, and even go in for a minority stake.