MosChip proposes 73% Vayavya Labs deal with Rs 154.52 crore cash

MosChip Technologies Limited has proposed to buy a 73% controlling stake in Vayavya Labs Private Limited for Rs 154.52 crore in cash plus up to Rs 112.1959388 crore in equity shares, subject to shareholder and other approvals, and has agreed to seek the remaining 27% in FY 2028-29.

What is MosChip buying from Vayavya Labs?

MosChip is proposing to acquire 73% of Vayavya Labs, following board approval on October 28, 2026. Completion would give MosChip management control and make Vayavya Labs a subsidiary on a going-concern basis, together with its intellectual property, employees, customers and trade partners.

Vayavya Labs was incorporated in 2006 and is headquartered in Belagavi, with delivery centres in Belagavi and Bengaluru. Its work covers semiconductors, consumer electronics, automotive, electronic design automation, communications and connectivity, which MosChip said would support the scale-up of its software-led Product Engineering Solutions business.

The 73% acquisition would also bring Vayavya Labs' wholly owned California subsidiary into the group as a step-down subsidiary. MosChip said the California entity operates in the same line of business, and that Vayavya Labs, its founder and other shareholders are not related parties to MosChip directors.

How is MosChip paying for the 73% Vayavya Labs stake?

MosChip proposes to pay Rs 154.52 crore in cash for 287,474 Vayavya Labs shares and issue up to 5,050,686 MosChip shares for another 208,773 Vayavya Labs shares. The equity issue is non-cash consideration and would be made to Vayavya Labs shareholders through a preferential allotment.

MosChip would issue the swap shares at Rs 222.14 each, comprising a face value of Rs 2 and a premium of Rs 220.14 per share. The maximum 5,050,686 shares are proposed as consideration for the acquisition rather than as a cash-raising exercise.

The Rs 222.14 issue price was the 90-trading-day volume-weighted average price on the National Stock Exchange, or NSE, before the relevant date of October 26, 2026. This was above the 10-trading-day NSE volume-weighted average price of Rs 179.65, while an October 28, 2026 valuation report determined the MosChip equity-share value at Rs 222.14.

What capabilities would Vayavya Labs add to MosChip?

MosChip said the combined organisation would have more than 2,000 employees and a delivery and engagement footprint across six locations after the acquisition. Those locations are Ahmedabad, Belagavi, Bengaluru, Hyderabad, Pune and Silicon Valley in the United States.

Vayavya Labs' stated capabilities include embedded software and systems, digital-twin virtualisation, verification and validation technologies. Its offerings include virtual electronic control unit solutions, software-driven verification, Advanced Driver Assistance Systems validation and automotive functional-safety work, adding to MosChip's stated silicon, embedded-software, system-validation and platform-integration scope.

Vayavya Labs holds nine granted patents and participates in semiconductor and automotive industry standards, according to MosChip. The filing describes its Hardware-Software Interface methodology as a mechanism for integrating hardware and software layers in engineering programmes.

Vayavya Labs serves Tier-1 semiconductor companies as well as customers in consumer electronics, mobility, automotive communications and connectivity. Its two Indian development centres are in Bengaluru and Belagavi, and MosChip said its presence also extends to the United States, Europe, Israel and Japan.

When will MosChip acquire the remaining 27% of Vayavya Labs?

MosChip has approved shareholder agreements to acquire Vayavya Labs' remaining 27% after two financial years, in FY 2028-29. The filing does not disclose the consideration, valuation method or exact completion date for that later acquisition.

For the initial 73%, MosChip said it hopes to complete the transaction immediately after shareholder approval of Item No. 1 and fulfilment of conditions precedent in the share purchase agreement. The extraordinary general meeting is scheduled for November 25, 2026, making the shareholder vote a stated condition before completion rather than evidence that the deal has closed.

MosChip described Vayavya Labs as EBITDA-accretive, where EBITDA means earnings before interest, tax, depreciation and amortisation. It also said Vayavya Labs recorded revenue growth over the past five years and that foreign-exchange revenue outpaced Indian-rupee revenue in FY 2025-26, but did not disclose revenue, EBITDA or growth-rate figures.

How will MosChip complete the preferential share issue?

MosChip proposes to allot the shares to 69 identified Vayavya Labs shareholders, including individuals, a Hindu Undivided Family, companies and limited liability partnerships. All the proposed allottees are classified as non-promoter or public-category holders, and no MosChip promoter, director, key managerial personnel or senior management personnel intends to subscribe.

The preferential issue requires shareholder approval through a special resolution under the Companies Act, 2013 and Securities and Exchange Board of India regulations. MosChip said it would seek in-principle approval from the stock exchanges on the day it sent the extraordinary general meeting notice for the November 25, 2026 vote.

MosChip would issue the swap shares only after receiving the Vayavya Labs purchase shares from the proposed allottees as non-cash consideration. The filing also says the allotment is conditional on the allottees not having sold MosChip shares during the 90 trading days before October 26, 2026, and that applicable holdings would be subject to regulatory lock-in requirements.

Conclusion

MosChip's proposed transaction would provide 73% control of Vayavya Labs for Rs 154.52 crore in cash and up to Rs 112.1959388 crore in newly issued shares. The filing presents the combination as an expansion of MosChip's engineering scope across silicon, embedded software, digital twins, automotive validation and system integration, supported by more than 2,000 combined employees and six locations.

The next disclosed event is the November 25, 2026 extraordinary general meeting, where shareholders will vote on the preferential issue. Completion of the 73% acquisition remains subject to that approval and the agreed conditions precedent, while the proposed acquisition of the final 27% is planned for FY 2028-29.