It is jointly developing a five-seater in association with NAL

The Mahindra Group, which recently completed the acquisition of two Australian companies — Gippsland Aeronautics, a manufacturer of small aircraft, and Aerostaff, an aircraft component manufacturer — on Saturday announced its intention to “become a significant player in the market for small turboprop aircraft.”

Speaking at an event to welcome the arrival in Bangalore of the GippsAero GA8-TC Airvan, a single-engine aircraft, which is circumnavigating the globe, Vice Chairman of the group Anand Mahindra reiterated the group's commitment to become “the Indian equivalent of Embraer,'' the Brazilian aircraft manufacturer.

Pointing out that the Airvan is the first aircraft manufactured in Australia to circumnavigate the world, Mr. Mahindra said the company would “lend its brand, reach and provide finance to GippsAero to reach markets in many countries.” The company would invest about Rs.150 crore in Aerostaff and about Rs.100 crore in GippsAero in the next couple of years, he said.

Mr. Mahindra said offset stipulations for defence contracts, which specify that a portion of the value of contracts be sourced from entities in India, “provide a key revenue underpinning for Indian companies.”

He said the acquisitions would enable his group to take “advantage of these opportunities.”

Mahindra Systech President and member of the Mahindra Group Board Hemant Luthra said the Airvan had the “highest lift to cost ratio in its class.”

Mahindra Aerospace would like to use GippsAero's facilities to manufacture 8/10/14-seater turboprop aircraft, he said. “Turboprops are economical and cost-effective on short hauls,” he said.

“On short hauls such as Mumbai to Nashik, they may be cheaper than travelling by a Mercedes Benz,” he remarked.

Mr. Luthra said GippsAero had already received “type certification” for its 18-seater aircraft from the Australian Civil Aviation Safety Authority.

He said GippsAero had an order book of about 20 planes a year, mainly 10-14-seaters.

While Kotak Private Equity and Mahindra Aerospace Pvt. Ltd. hold 75 per cent of the equity in GippsAero, the two entities will be in full control of Aerostaff, which manufactures sheet metal components and assemblies for aircraft.

Mr. Luthra said the acquisitions provided “a $5 billion opportunity” for the Mahindra Group.

Mahindra Aerospace was jointly developing a five-seater in association with the National Aerospace Laboratory, Mr. Luthra said. Asked if the group plans to establish a unit at the aerospace SEZ near Bangalore airport, Mr. Luthra said,

“It makes more sense for us to be in Hyderabad because the SEZ here is not yet ready.”

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