Rama Steel Tubes Limited (RSTL) (NSE: RAMASTEEL; BSE: 539309) has announced plans to acquire Automech Group, a UAE-based provider of high-precision manufacturing and engineering services, for a total consideration of AED 296 million (approximately ₹728 crore). The proposed acquisition marks a strategic step in Rama Steel’s diversification into high-margin engineering and fabrication segments and strengthens its footprint across the GCC and MENA regions.
Automech Group is a multi-award-winning engineering company with capabilities in precision machining, heavy fabrication, marine services, and dewatering solutions. The acquisition is expected to transform Rama Steel from a steel pipes and tubes manufacturer into a broader engineering-led enterprise with access to value-added, high-margin segments.
Under the transaction structure, RST International Trading FZE, a wholly-owned subsidiary of Rama Steel Tubes in the UAE, will acquire a 78.38% stake in Automech Group, while Rama Steel Tubes Limited will directly acquire the remaining 21.62%. Share Purchase Agreements have been executed with the seller, Jagjit Gouri. The transaction is expected to be completed within six months, subject to customary regulatory and other approvals.
Following the acquisition, Rama Steel expects a significant improvement in its consolidated financial performance. The company projects consolidated revenues to rise from ₹1,065 crore in FY25 to over ₹2,200 crore by FY27E, while EBITDA margins are expected to improve from around 4% to about 10%. Consolidated EBITDA is projected to increase from ₹46 crore in FY25 to approximately ₹236 crore by FY27E, driven by operational synergies, a richer product mix, and integration of high-margin engineering services.
Automech reported standalone revenues of ₹611 crore and a profit of ₹101 crore in FY25. Rama Steel also expects the acquisition to positively impact its standalone financials by shifting part of Automech’s production requirements to its manufacturing facilities in India, improving capacity utilization and cost efficiencies. In addition, proposed dividend and royalty flows from Automech to the parent company are expected to further support earnings once integration is completed.
The company said it plans to implement enhanced accounting, governance, and compliance practices at Automech to ensure transparency and alignment with global standards. Rama Steel stated that the acquisition will provide access to Automech’s API-, ASME-, and ISO-accredited facilities and its approved vendor status with ADNOC, enabling entry into marquee infrastructure, energy, and industrial projects in the Middle East. The transaction is positioned as a launchpad for Rama Steel’s global expansion into precision-engineered and value-added products, significantly broadening its business profile beyond steel pipes and tubes.