Gravita India to Acquire RMIL for ₹565 Crore in Copper Sector Push

Introduction

Recycling major Gravita India Limited has announced a significant strategic move, signing a binding term sheet to acquire up to a 100% stake in Rashtriya Metal Industries Limited (RMIL). The deal, valued at up to ₹565 crore, marks Gravita's entry into the copper manufacturing and recycling sector, diversifying its portfolio beyond its core lead, aluminum, and plastic recycling businesses. This acquisition is poised to make RMIL a wholly-owned subsidiary of Gravita, integrating a legacy copper manufacturer into its expanding operations.

Details of the Transaction

The agreement involves the purchase of shares from RMIL's existing shareholders for a total cash consideration of up to ₹565 crore. An earlier definitive agreement mentioned the acquisition of a 98.95% stake for ₹559.08 crore. The transaction is classified as a non-related party deal, confirming that none of Gravita's promoters or group companies hold any interest in RMIL. The acquisition will be funded entirely through cash, facilitated by bank transfers or cheques. The indicative timeline for the completion of this transaction is March 31, 2026, contingent upon the successful completion of due diligence, execution of definitive agreements, and fulfillment of other customary closing conditions. No specific governmental or regulatory approvals are required for the deal to proceed.

A Look at Rashtriya Metal Industries (RMIL)

Established in 1946, Rashtriya Metal Industries Limited has a rich history spanning over seven decades in the Indian metals industry. The Mumbai-based company is a prominent manufacturer of copper and copper alloy products, including strips, coils, and case cups. Its products serve critical sectors such as electrical, automotive, engineering, and defence, with the company being a key supplier to India's Ministry of Defence. RMIL has also cultivated a strong international presence, with approximately 40% of its revenue coming from exports to countries like the UAE, USA, Thailand, Saudi Arabia, and Kenya. The company operates an integrated manufacturing facility in Sarigam, Gujarat, with a production capacity of 31,200 metric tonnes per annum (MTPA).

RMIL's Financial Strength

RMIL has demonstrated consistent and robust financial growth over the past three fiscal years. This strong performance underscores the value it brings to Gravita's portfolio. For the financial year ending March 31, 2025, RMIL reported a turnover of ₹910 crore and an EBITDA of ₹60 crore. The company's net worth stood at ₹300 crore with total assets valued at ₹558 crore.

Strategic Vision Behind the Acquisition

For Gravita India, this acquisition is a calculated step towards strategic diversification and vertical integration. The move allows the company to expand into the high-growth copper vertical, reducing its dependence on the lead business. By integrating RMIL's operations, Gravita can move from copper scrap recycling to producing value-added copper alloys, thereby enhancing its competitive position and improving margin quality. The company highlighted the potential for strong operating synergies with its existing plants in procurement, logistics, and sales. Furthermore, acquiring RMIL provides Gravita access to high-entry-barrier segments like automotive and electrical applications, which are closely aligned with national initiatives such as 'Make in India'.

Gravita's Financial Health and Market Response

Gravita India's decision to acquire RMIL comes from a position of financial strength. In the third quarter of fiscal year 2026, the company reported strong results, with a consolidated net profit of ₹97.7 crore, a 25.3% year-on-year increase. Its revenue from operations grew to ₹1,017 crore, and EBITDA saw a sharp 49.3% rise to ₹120.2 crore. The market reacted positively to the acquisition announcement. Gravita India's shares advanced, with one trading session seeing a rise of 2.31% to ₹1,712.65, reflecting investor confidence in the strategic rationale behind the deal.

Path Forward

With the binding term sheet signed, both companies will now proceed with the necessary due diligence and the finalization of definitive agreements. Investors and market analysts will be closely watching for the successful completion of the transaction by the March 31, 2026 deadline. This acquisition is set to reshape Gravita's business profile, positioning it as a more diversified and integrated player in the global metals and recycling industry. The company aims to achieve a bottom-line growth target of around 35% and an EBITDA of ₹1,000 crore by FY29, and this acquisition is a key part of that long-term strategy.

Conclusion

Gravita India's acquisition of Rashtriya Metal Industries is a landmark deal that signifies a strategic pivot into the copper market. By bringing a legacy manufacturer with a strong product portfolio and export network into its fold, Gravita is not just expanding its revenue streams but also building a more resilient and integrated business model. The successful integration of RMIL will be crucial in unlocking the anticipated synergies and driving long-term value for shareholders.