The largest independent MRO company in India and a significant provider of aviation services, Air Works, have announced their acquisition by the Adani Group at a time when the industry is gearing up to enter the next stage of expansion.
In an exclusive interview with Business Today, the normally reclusive managing director and CEO of Air Works, D Anand Bhaskar, broke his silence and stated, “Till now, drawing significant money into the aviation business, and more so into the MRO area, was not happening. That was because the category was mostly engaged in labor-intensive jobs and volumes and profitability were lacking.
According to Bhaskar, the MRO section worked at the level of a micro, small, and medium company (MSME), just like the rest of the industry. However, as the effects of the Covid-19-induced downturn faded, the expansion in the aviation industry and an increase in volumes across segments made the MRO business more appealing to investors like the Adani Group.
In order to make this larger leap of faith in terms of components, engines, etc., the industry also requires stronger funds. These new locations that we are investigating require a lot of capital. Therefore, there is a need for larger firms to enter the market, said Bhaskar outside of the two-day gathering of the industry group MRO Association of India in Delhi.
Through its subsidiary Adani Defence Systems & Technologies Ltd., the $25 billion Adani Group announced on October 18 that it has reached a definitive agreement to buy Air Works for an estimated $400 crore (ADSTL). By 2030, the Indian MRO market is projected to increase by three times, from $1.7 billion to $5 billion.
The MRO business is crucial to both the aerospace and the defence industries because it provide essential engineering support to make aircraft airworthy.