Adani to acquire stake in India’s largest aircraft maintenance, repair and overhaul organization

Adani Group plans to invest in Mumbai-based Air Works Group to strengthen its civil aviation portfolio.

The Air Works Group is the largest independent Aircraft Maintenance, Repair and Overhaul (MRO) organization in India. It serves civil aviation companies like IndiGo, Vistara and GoAir among other international airlines like Etihad, FlyDubai, Lufthansa, Turkish Atlantics and Virgin Atlantic.

The company has also partnered with Boeing for heavy maintenance checks on three Indian Navy P-81 long-range maritime patrol aircraft.

“The Adani Group has started its due diligence in the Air Works Group,” said a source familiar with the developments. cited by The Indian Express.

Air Works Group operates in 27 Indian cities and competes with other MRO companies such as GMR Aero Technic and state-owned AI Engineering Services Ltd.

The Gautam Adani-owned conglomerate already operates seven airports in the country in Mumbai, Ahmedabad, Lucknow, Thiruvananthapuram, Mangalore, Jaipur and Guwahati.

“The proposed deal with Air Works is in line with Adani Group’s plans to capitalize on opportunities arising from India’s growing civil aviation market and growing need for MRO services,” another source told the publication. aforementioned.

Nearly 90% of India’s RRM needs are met by imports. Thus, there would be great growth potential for the indigenous MRO sector. In fact, the GST rate on domestic MRO services has been reduced to 5% from 18% in March 2020. They can even qualify for a full input tax credit, which has been a huge relief for the customer. ‘industry.

Indian airlines used to send their planes to China, Singapore, UAE and Sri Lanka for maintenance due to higher taxes in the country.

“Adanis has been keen for some time to complement its airport portfolio with MRO. They have an agreement with Indamer Aviation but it didn’t really work out. They even made appointments last year to decide on the broader MRO strategy for the business,” an industry source revealed to the Indian Express.

GT Capital Group, with a 25.74% stake, is the largest shareholder of Air Works Group as of 31st March 2021. Punj Lyod Aviation holds a 23.25% stake. The Menon family who founded the company in 1951 also hold a 15% stake in the Air Works group.

The company had amended its memorandum of association to increase its authorized share capital and create a new class of Series B shares in November 2021. This would underline that the Air Works Group is currently in the market to raise new funds.

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