After investing a little over $6 million in Bangalore-based Maini Precision Products during mid-2005, a private equity fund managed by US-based financial powerhouse AIG is close to exiting the company with healthy returns. Anil Ambani-led Reliance Private Equity is expected to come in with a primary investment as well as in addition to give a part exit to AIG with a roadmap to fully acquire AIG stake in the company over a period of time.
Maini Precision Products is owned by the Maini family which is also the pioneer in the electric vehicles’ segment having innovated with its ‘Reva’ car, the business of which is now under the control of the Mahindra Group.
According to investment bankers close to the transaction on Maini Precision Products, the deal is expected to be finalised within two weeks time. The management of Maini Precision Products said that they are not aware of any such transaction while Reliance Equity Advisors did not respond to queries.
Maini Precision Products has a topline of around Rs 180 crore and it is understood to be valued at Rs 200 crore for the ongoing transaction.
Maini Precision is the flagship company of the Bangalore-based Maini Group, |founded in 1973 by Sudarshan Maini to create a niche in sophisticated light engineering products globally.
The company manufactures precision machined components for the automotive, material handling, engineering and aerospace industries. Its list of customers include General Motors, Eaton, Volvo among others.
Investment bankers further added that the auto components business has taken a hit during the past year due to the economic meltdown globally but they have been able to sail through without getting into deep losses.
However, bankers added that the new investors are looking at the company more in terms of its aerospace component business which is expected to grow given that the offset business which is expected to come India’s way after a series of deals which India is signing with global suppliers. Early this year, Maini Group’s aerospace business signed a deal with Airbus to supply some parts for its various platforms. In addition to this transaction, the aerospace business has relationships with Marshall Aerospace, Hindustan Aeronautics Limited amongst others. It is learnt that the aerospace business of this group is looking at a Rs 200 crore expansion plan gearing itself to tap the huge offset business.
AIG had invested in the Maini Precision Products through Ambadevi Mauritius Holding Limited, a SEBI registered Foreign Venture Capital Investor (FVCI) and is a 100 per cent subsidiary of the American International Assurance Company (AIA). AIA is a wholly-owned subsidiary of the American International Group, Inc.