Salarpuria Sattva Buys 2 Cos in Aerospace Sector

Introduction

Real estate developer Salarpuria Sattva has acquired two Bangalore-based companies in the aerospace sector — Aero Accessories and Systems Private Ltd (AASPL) and VXL eTech India.

While AASPL designs, develops, manufactures and supplies Landing Gear Actuators and other types of actuators, electrical motors, and generators for airborne application, VXL eTech offers custom data acquisition systems, intelligent monitoring systems, medical devices, critical subsystems to the power sector for customers in India and abroad.

According to industry estimates, the combined revenues of these companies could be in the range of Rs 10-15 crore, employing around 100 people.

Capital-intensive

Mr Bijay Agarwal, Chairman, Sattva Group, told Business Line that aerospace business was highly capital-intensive and has long-term annuity business, and “this foray fit in line with the overall business philosophy of the group”. According to him, investments are through debt and equity.

On why the company diversified into aerospace, he pointed out that the sector, especially in the design, development support of military products, offered high growth opportunities. And with an increased emphasis by the Government through offset programmes and increased allocation of resources for indigenous development of products, he expected the aerospace industry to outperform other sectors.

AASPL and VXL eTech India have now been re-branded as Sattva AASPL and Sattva eTech.

Major clients

According to Mr Agarwal, Sattva AASPL's clientele include the Indian Air Force, Army, Navy, DRDO labs and NAL, and users of military aircraft, Border Security Force, and Coast Guard.

Sattva eTech supplies embedded products to Fortune 500 companies worldwide, and also to public and private sector companies in India.

“Both companies provide complementary services to each other, while Sattva AASPL does the systems integration of products as mentioned above. Sattva eTech undertakes and provides all electronics design development services to AASPL as well as undertakes its own sales,” he explained.

Mr Agarwal said that the group plans to pursue expansion of product portfolio into different domains “by offering other aircraft systems design solutions as well as design support for aircraft systems,” as and when opportunities arise. There are also plans to add 50-70 employees this year.

Revenue projection

In the next five years, the group hopes “to become the sole supplier of aerospace motors, generators and actuator systems, while also undertaking new development as well as repair and overhaul of the existing product range,” explained Mr Agarwal.

Though the current revenues are moderate, he expected annual revenues of over Rs 100 crore in the next 10 years mainly “due to R&D capabilities and orders in hand”.

Sattva AASPL has also made international bids, he added. The company has also kept its options open on future acquisitions.

The group has also been allotted five acres in the proposed aerospace SEZ in Bangalore.

Source

India Brand Equity Foundation, February 1, 2011