The firms said Tuesday that The Adani Group, which runs seven airports across the nation, will buy MRO firm Air Works Group in an effort to expand its civil aviation portfolio. The largest independent aircraft maintenance, repair, and overhaul (MRO) company in India, Air Works, has signed binding contracts to be acquired by Adani Defence Systems & Technologies Ltd for an enterprise value of Rs 400 crore.
The 71-year-old aviation firm provides services for over a dozen foreign airlines, including Virgin Atlantic, Lufthansa, Turkish Airlines, FlyDubai, and Etihad, in addition to IndiGo, GoAir, and Vistara. It has also built operational capabilities for important defence and aerospace platforms in the nation, such as MRO on the landing gear of the Indian Air Force’s 737 VVIP aircraft and maintenance checks of the Indian Navy’s P-8I long-range maritime patrol aircraft.
With a presence in 27 cities across India, Air Works Group competes against 50 independent MRO providers in India, including the government-run AI Engineering Services Ltd and GMR Aero Technic.
According to documents filed with the Ministry of Corporate Affairs, GTI Capital Group, an investment vehicle with a focus on India, held 25.75% of the shares in Air Works Group as of March 31, 2021. Then Punj Lloyd Aviation, a division of the now-insolvent Punj Lloyd Ltd., held a 23.24% interest. The Menon family, who started Air Works in 1951, today owns about 15% of the business.
Along with airports in Ahmedabad, Lucknow, Thiruvananthapuram, Jaipur, Guwahati, and Mangaluru, the second-largest airport in the nation is located in Mumbai and is run by billionaire Gautam Adani’s Adani Group.
The domestic MRO GST rate was reduced from 18% to 5% in March 2020 with a full input-tax credit, which the MRO business hailed as a major relief. Domestic airlines used to send their aircraft to nations like Sri Lanka, China, Singapore, and the UAE for maintenance due to India’s cost disadvantage caused by higher taxes.
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