Rama Steel Tubes Limited, recognised as one of India’s leading manufacturers of steel pipes and tubes, today announced a pivotal strategic acquisition designed to redefine its market position.
The company revealed its plan to acquire the UAE-based Automech Group, a multi-award-winning provider specialising in high-precision manufacturing services, machines, and components.
The total consideration for this strategic transaction is AED 296 million (approximately Rs. 728 Crores).
This acquisition is deemed a “defining milestone” in RSTL’s strategy to diversify into high-value engineering services and significantly enhance its presence across the Gulf Cooperation Council (GCC) and Middle East and North Africa (MENA) regions.
The move is set to leverage Automech’s world-class engineering and machining capabilities with RSTL’s substantial manufacturing scale. According to the Chairman & Managing Director, Naresh Kumar Bansal, this is not merely an acquisition but a “transformative opportunity” that marks the upscaling of Rama from a pipes company into a high-end engineering company.
Launch Pad for Global Push
The acquisition rationale highlights that the combination of RSTL’s strong manufacturing foundation with Automech’s advanced capabilities—including precision machining, heavy fabrication, and marine services—will provide immediate access to high-margin, value-added precision engineered products.
Automech holds critical accreditations, including API, ASME, and ISO standards, and is an ADNOC-approved vendor, enabling RSTL to gain access to marquee clients in the infrastructure, energy, and industrial sectors. Founded in 1991, Automech Group is a diversified engineering conglomerate serving oil & gas, marine, energy, construction, and heavy industries.
The transaction structure stipulates that RST International Trading FZE (UAE), a wholly owned subsidiary of RSTL, will acquire 78.38%, with RSTL acquiring the remaining 21.62% of the Automech Group. The closing is anticipated within six months, subject to customary approvals.
Expected Financial Explosion
The financial forecasts following the integration are exceptionally robust. Post-acquisition, RSTL expects consolidated total revenue to increase by over 113% (when comparing FY27E expected figures to the FY25 consolidated figure).
Revenue is projected to rise from Rs. 1,065 crores reported in FY25 to approximately over Rs. 2,200 crores by FY27E.
Perhaps the most dramatic forecast is the expected growth in profitability:
- Consolidated EBITDA is anticipated to rise nearly 415%, climbing from Rs. 46 crores in FY25 to an expected Rs. 236 crores in FY27E.
- EBITDA margins are projected to nearly triple, improving from approximately 4% to around 10%.
These gains are expected to be driven by operational synergies and a more profitable product-service mix. Automech’s standalone financials for FY25 show reported revenues of Rs. 611 crores and profit standing at Rs. 101 crores (converted using the rate of 24.33 AED to INR).
RSTL also plans to bolster its standalone financials by shifting some production chain elements from the UAE to its domestic Indian manufacturing operations, further supplemented by proposed dividend and royalty payments from Automech once operations are integrated.
RSTL Chairman Naresh Kumar Bansal affirmed that by integrating Automech’s capabilities with their strong manufacturing foundation, RSTL is “creating a platform for sustainable growth across India and the GCC” and is positioned to deliver long-term value to stakeholders.
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