Rama Steel Tubes to Acquire UAE's Automech Group for ₹728 Crore, Boosting Revenue by 113%
Rama Steel Tubes Limited plans to acquire UAE's Automech Group for ₹728 Crores. The deal is expected to boost consolidated revenue by over 113% to ₹2,200 crores by FY27E and EBITDA margins from 4% to 10%. The acquisition is anticipated to close within six months.
The acquisition represents a significant strategic shift for Rama Steel Tubes, substantially increasing its revenue and diversifying its business into higher-margin segments. The financial projections indicate a transformative impact on the company's performance.
The acquisition is strategic, diversifies the company into high-margin engineering services, and is projected to significantly increase revenue and profitability. Management commentary is also positive.
Rama Steel Tubes Limited (RSTL) has announced its plan to acquire the UAE-based Automech Group for a total consideration of AED 296 million (approximately ₹728 Crores). This strategic move aims to diversify RSTL into high-value engineering services and expand its presence in the GCC and MENA regions.
The acquisition is expected to significantly impact RSTL's financial performance. Consolidated total revenue is projected to increase by over 113%, rising from ₹1,065 crores in FY25 to approximately ₹2,200 crores by FY27E. EBITDA margins are anticipated to improve from 4% to 10%, with consolidated EBITDA expected to grow by nearly 415%, from ₹46 crores in FY25 to an estimated ₹236 crores in FY27E. Automech Group reported standalone revenues of ₹611 crores and a profit of ₹101 crores in FY25.
Furthermore, the acquisition will boost Rama Steel's standalone financials by shifting part of the production chain to its domestic Indian operations. Proposed dividend and royalty payments from Automech to the parent company are also expected to contribute positively. RSTL intends to implement robust accounting and governance practices at Automech.
Under the transaction, RSTL's wholly-owned subsidiary, RST International Trading FZE, will acquire 78.38% of Automech Group, while RSTL will acquire the remaining 21.62%. The deal is expected to close within six months, subject to customary approvals. This acquisition combines RSTL's manufacturing strength with Automech's expertise in precision machining, heavy fabrication, marine services, and dewatering solutions, providing access to marquee clients in infrastructure, energy, and industrial sectors.
Naresh Kumar Bansal, Chairman & Managing Director of RSTL, stated, "This acquisition is a defining milestone in RSTL's evolution from a leading steel tubes manufacturer to a solutions-led engineering powerhouse... It is not just an acquisition it is a transformative opportunity that sets the stage for the next phase of RSTL's growth story."
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Rama Steel Tubes Limited filed this with the NSE as a statutory disclosure, categorised under acquisition. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Rama Steel Tubes Limited. Read the original for the full detail.