New Delhi, Aug. 3 -- Private equity firms Blackstone and EQT are in the fray to acquire majority stakes in two Indian precision engineering companies with the aim to convert them into a platform for a larger play in the sector, several people familiar with the matter told VCCircle.
Blackstone is in advanced discussions to pick up majority stakes in Haryana-based Balaji Precision Components and Tamil Nadu-based Rabwin Industries, one of the people cited above said, adding that it has already submitted a term sheet.
Both the target companies are valued at around $200-250 million (Rs 1,900-2,380 crore), taking the total potential deal size to $400-500 million.
"The PE firm is looking at both companies, Rabwin and Balaji, and will structure the deal in such a way that it becomes a platform for them to acquire more companies and have a wider play in the segment. The deal will include taking majority stakes across these two entities," the person said.
A second person said Swedish private equity firm EQT is also separately evaluating investing in the two companies.
"EQT, given its depth and strategy, may club a few more companies in addition to Rabwin and Balaji for its platform play," the person said, adding that while Blackstone has submitted a term sheet, EQT is still evaluating the deal and is yet to make an offer.
VCCircle couldn't immediately ascertain the exact deal structure. However, both the people cited above said it could have a multi-tier structure, with one company taking control of the other, allowing unified control to whichever entity-Blackstone or EQT-ends up taking over.
Meanwhile, Moneycontrol separately reported that ChrysCapital, Platinum Equity and Blackstone are in the race to acquire a majority stake in Rabwin Industries.
VCCircle has gathered that ChrysCapital is currently the highest bidder, followed by Platinum and Blackstone.
Rabwin is seeking a valuation of about $210-230 million, making it a deal worth Rs 1,600-1,700 crore if the stake exchanged is 70-80%.
If ChrysCapital or Platinum acquire Rabwin, Blackstone and EQT will likely have to look for another company to pair with Balaji for their planned platform play.
A spokesperson for Blackstone said the information is incorrect and that it is not evaluating the two companies. Emails sent to the spokespersons of EQT, Balaji Precision and Rabwin Industries remained unanswered till the time of publishing this article.
Founded in 2002, Balaji Precision Components offers transmission and engine components, driveline components, technology-enabled reverse engineering product optimisations, and engineering design services. It operates three manufacturing facilities, caters to over 20 industries, serves 75 clients globally, and supplies over 3.2 million parts annually, according to its website.
Balaji reported net sales of Rs 371 crore in FY25 as against Rs 351 crore a year ago. Profit after tax grew to Rs 136 crore from Rs 127 crore during the same period, according to VCCEdge, the data and research platform of VCCircle.
Rabwin Industries, founded in 2000, manufactures precision metal parts for industries such as switchgears, pumps, valves, machine tools, textiles, railways and general engineering.
The company posted revenue of Rs 272 crore in FY25, compared with Rs 220 crore a year ago. Profit after tax was Rs 34.7 crore, as against Rs 28.7 crore a year ago, as per VCCEdge.
The precision engineering space, particularly aerospace components, has been witnessing significant investor interest.
In May, VCCircle reported that industrial and automotive parts maker JK Fenner (India) Ltd was evaluating picking up a significant stake in a south India-based precision components maker.
In April, Unimech Aerospace and Manufacturing Ltd acquired tubing and precision-engineered components manufacturer Hobel Bellows Co for $48 million.
In March last year, Rangsons Aerospace, a provider of defence and aerospace manufacturing solutions, raised Rs 300 crore from private equity firm ValueQuest Advisors. The same month, Zomato CEO Deepinder Goyal invested $20 million (Rs 172 crore then) in LAT Aerospace, a stealth startup co-founded with former Zomato COO Surobhi Das.
Published by HT Digital Content Services with permission from VC Circle.