Mahindra & Mahindra, Indian automobile giant, has announced that the company has acquired 75.1 per cent stake in two Australian aerospace firms for Rs 175 crore.

With this acquisition, M & M, which worth Rs 13,364 crore, will make its debut in the aero space business.

Mahindra Aerospace Pvt. Ltd, which is a subsidiary of M&M, has bought a majority stake in component maker Aerostaff Australia and general aircraft manufacturer, Gippsland Aeronautics, collectively with the Kotak Private Equity.

One of the members of M&M’s group management board, Mr. Hemant Luthra informed that the company has expected to manufacture 475 aircraft in the 2- to 20-seater range, and eyeing a peak revenue of about Rs 650 crore.

The top management in both the acquired aeronautic companies will be regulated by the Mahindra & Mahindra. A new plant will be set up in the Bangalore in order to provide dual shoring benefits to the customers.

The turboprops market is amongst the fastest growing segments in the general aviation. Turboprops can be used to get operational adaptability in environments even with the poor infrastructure and can serve the market at the lowest cost per passenger seat per kilometer.

M&M had already showed its intention to enter the aviation business in the year 2006 when it acquired Flexion Technologies, which is an engineering design company.

The vice-chairman and managing director of the Mahindra group, Mr. Anand Mahindra said, “M&M’s move into the aerospace segment is deliberate, bold and timely, and is supported by a renewed demand for economical air transportation around the world. Our investment in component capability addresses the growing needs of both the civil and defense markets.”