Rama Steel Tubes Automech Acquisition Signals Strategic Shift into High-Value Engineering

Rama Steel Tubes Limited has announced a landmark strategic move with its plan to acquire the UAE-based Automech Group for a total consideration of AED 296 million, approximately ₹728 crore. The acquisition represents a defining moment for Rama Steel as it transitions from being primarily a manufacturer of steel pipes and tubes into a diversified, high-end engineering solutions provider with a growing international footprint.

The transaction will be executed through a combination of direct and subsidiary investments. RST International Trading FZE, the company’s wholly owned subsidiary in the UAE, will acquire a 78.38 per cent stake in Automech Group, while the remaining 21.62 per cent will be acquired directly by Rama Steel Tubes Limited. The deal is expected to be completed within six months, subject to customary regulatory and statutory approvals.

Automech Group is a well-established player in high-precision manufacturing, supplying engineered components, heavy fabrication, marine services, and dewatering solutions to clients across the infrastructure, energy, and industrial sectors. Its operations are backed by globally recognised API, ASME, and ISO accreditations, along with approved vendor status from ADNOC. These credentials are expected to give Rama Steel immediate access to marquee clients and high-margin business segments across the GCC and MENA regions.

From a financial perspective, the acquisition is projected to significantly scale up Rama Steel’s consolidated performance. The company expects consolidated revenues to rise by over 113 per cent, from ₹1,065 crore in FY25 to more than ₹2,200 crore by FY27. Automech reported standalone revenues of ₹611 crore and profits of ₹101 crore in FY25, highlighting its strong operational base.

Strategic synergies are also central to the deal. A portion of Automech’s production is planned to be shifted to Rama Steel’s domestic manufacturing facilities in India, improving capacity utilisation and cost efficiencies. In addition, proposed dividend and royalty payments from Automech to the parent company are expected to further strengthen Rama Steel’s standalone financials once integration is completed.

Rama Steel has also indicated plans to implement world-class accounting, governance, and compliance practices at Automech. Overall, the acquisition is seen as a launch pad for Rama Steel’s global expansion into precision-engineered, value-added products, firmly repositioning the company as a high-end engineering enterprise.