India’s Maini Global Aerospace gets $10m in PE funding

According to Naresh Palta, MGA's CEO, the company is handling a clutch of outsourcing contracts from the like of Safran, BAE Systems, Eaton, Goodrich, Magellan, Parker Aerospace and MUT Aero-Engines. It has also signed an agreement with the European Aeronautic Defense and Space Company (EADS) to jointly explore new technology, The Economic Times reported.

With Frost & Sullivan tipping India to spend $100 billion on defense modernization programs by 2022, investor interest in the aerospace and defense sector is growing. This is underpinned by a defense offset policy, whereby the Indian government agrees to buy products from foreign suppliers on the condition that these companies purchase a certain amount of goods locally.

Offset programs are said to generate $25 billion a year. According to Axis Aerospace Technologies, any defense contract worth more than $60 million is subject to an industrial offset liability equal to 30-50% of the contract value. These funds are supposed to be used to improve India's defense infrastructure.

The long sales cycles and lack of transparency on future demand means that orders can be inconsistent.

However, New Enterprise Associates and Elephant Capital were suitably convinced to commit INR1.25 billion ($24 million) for a minority stake in Delhi-based Air Works India Engineering last year, The Economic Times reported. Warburg Pincus invested $60 million in Bangalore-based QuEST Global, which designs software for GE, Rolls Royce and Airbus, while Aureos Capital and Sidhi have committed INR600 million to Hind High Vacuum over the last five years.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Industrials
• South Asia
• Expansion
• Warburg Pincus Asia
• New Enterprise Associates
• Aureos Advisers (Aureos Capital)
• TMT
• India
• Defense & aerospace