MTAR gets board's approval for acquisition of Gee Pee Aerospace -; Defence; Stock plunges 3.5%

11 May 2022 , 09:57 AM

The Board of Directors of MTAR Technologies Ltd have approved the acquisition of shares of Gee Pee Aerospace & Defence pvt. Ltd., an MSME Company for a consideration of Rs8.82 crore.

The Management is currently in discussion with the shareholders of Gee Pee Aerospace & Defence Pvt. Ltd. on the terms and conditions. This acquisition is expected to provide a wide array of benefits under MSME category including the increased potential of entering into offset partnership with global OEMs as foreign partners get an offset credit of up to 1.5 multiple on Indian content.

Further, “the public procurement policy mandates procurement of up to 20% of requirements of Gott departments through MSMEs, which is expected to augment our customer base. In addition, this shall enhance our capacity that enables us to address more orders, thereby expanding our product portfolio”, said the company.

Commenting on the acquisition, Parvat Srinivas Reddy, Managing Director, MTAR Technologies, said, “The acquisition of Gee Pee Aerospace shall strengthen our capacities in bottleneck areas, which is expected to fuel our revenue growth further specifically in defense and allied sectors.

We reiterate the revenue growth guidance of 30%-35% yoy with an EBITDA of around 30% in spite of supply chain disruptions due to COVID 19 pandemic followed by global geopolitical crisis for FY 22 and a revenue growth guidance of 50% YoY with an EBITDA of around 30% for FY 23.”

At around 10:01 AM, MTAR Tech was trading at Rs1355.05 per piece lower by 3.57% on the BSE.