Motherson to buy 50.1% of Rotary Connectors for Rs 500.4 crore to push defence wiring

Samvardhana Motherson International makes the parts that go into vehicles and machines, from wiring and mirrors to modules that large vehicle makers fit on their own assembly lines. On September 21, 2026, its board approved purchase by its wholly owned subsidiary Samvardhana Motherson Adsys Tech Limited of a 50.1% equity stake in Rotary Connectors Private Limited from existing shareholders, for an enterprise value of Rs 500.4 crore in cash , with Rotary to become an indirect subsidiary on closing expected by the fourth quarter of 2026-27 . The takeaway is that Motherson is buying a small but fast-growing maker of military-grade connectors to add Electrical Wiring Interconnect System, the wiring network that carries power and signals inside aircraft, capability to its Aerospace and Defence vertical.

What the board approved

The board meeting was held on September 21, 2026 . Samvardhana Motherson Adsys Tech Limited will hold 50.1% of the equity share capital of the target and will have the right to appoint majority directors on the board of the target . Post completion, Rotary Connectors Private Limited will become an indirect subsidiary of Samvardhana Motherson International Limited . The promoters of Rotary will continue to hold 49.9% equity stake .

The consideration is cash . Enterprise value is Rs 500.4 crore . Equity value will be determined as enterprise value plus net cash as on locked box date of March 31, 2026, with adjustments for any leakage or cash withdrawal during the period between locked-box date and closing date . The transaction is expected to be completed by the fourth quarter of 2026-27, subject to satisfaction of conditions precedent to closing .

The filing says the acquisition would not fall within related party transactions . No governmental or regulatory approvals are required for this acquisition .

Rotary is engaged in the business of manufacturing of military grade circular connectors and interconnection solutions having diversified application including in Aerospace and Defence sector . The industry to which the entity belongs is Aerospace and Defence . The target was incorporated on December 08, 2005 . It has three manufacturing facilities in Bengaluru, India .

The stated reason is that the strategic partnership supports Motherson Group vision of diversifying and scaling its Aerospace and Defence business vertical, particularly in the field of Electrical Wiring Interconnect System . Motherson established footprint in Aerospace and Defence, along with its geographic reach and customer access, can potentially be leveraged to accelerate the growth of the target business .

A small target growing fast

The filing gives three years of turnover for Rotary :

Period	Turnover
FY24	Rs 75.2 crore
FY25	Rs 102.8 crore
FY26, unaudited	Rs 123.5 crore

Turnover rose about 36.7% in FY25 and about 20.1% in FY26 on this series, showing a fast-growing base before Motherson steps in.

How Rotary compares with Motherson Aerospace scale

Motherson reported Aerospace division revenue of Rs 1,749 crore in FY25 and Rs 2,447 crore in FY26 . EBITDA was Rs 127 crore in FY25 and Rs 203 crore in FY26 . That implies a margin of about 7.3% rising to about 8.3%.

Period	Aerospace revenue	Aerospace EBITDA
FY25	Rs 1,749 crore	Rs 127 crore
FY26	Rs 2,447 crore	Rs 203 crore

Rotary turnover of Rs 123.5 crore in FY26 is about 5.0% of Aerospace revenue of Rs 2,447 crore in FY26 . On the May 2026 earnings call, an analyst referenced about Rs 2,400 crore revenue for the aerospace business and management did not correct that figure, which also points to Rotary at roughly 5.1% of that vertical .

The context is momentum. Aerospace revenues grew 40% year-on-year in FY26, taking top-line expansion to nearly 10 times over the last 3 years . In the first quarter of FY27, Aerospace delivered revenue growth of over 20% year-on-year . The order book increased by over 20% to USD 160.00 crore, providing strong long-term visibility . In the August 2026 update, the order book had grown by more than 17% since FY26 end, giving strong visibility on future growth .

Why connectors fit the diversification plan

Motherson frames Aerospace as a deliberate pillar beyond auto components. It describes itself as a global Design, Engineering, Manufacturing, Assembly and Logistics specialist combining operational excellence, capabilities and strategic global presence to power multi-industry expansion . The overarching target under Vision 2030 is 3CX10, where no country, customer or component should contribute more than 10% to revenues .

Aerospace sits inside Emerging Businesses with Elastomer, Lighting and electronics, Precision Metals and Modules, Services, Health and Medical, Logistics Solutions and Technology and Industrial Solutions . For FY26, Emerging Businesses reported full-year revenue of Rs 17,072 crore and EBITDA of Rs 1,825 crore . Management said the Aerospace business delivered 20% plus year-on-year revenue growth in the first quarter of FY27 and its order book grew 17% plus since FY26 end .

Capital allocation backs that shift. For FY27, total capex is expected to be Rs 6,000 crore plus or minus 10%, with non-automotive businesses accounting for about 60% of total capex . One ongoing Aerospace capacity project in India for surface treatment has scheduled start of production in the fourth quarter of FY27 . Two new facilities in India were coming on stream in the first quarter of FY27 to cater to additional demand .

Past build-out helps explain the playbook. Motherson completed the ADI Group acquisition, a French aerospace company, on May 13, 2024 . That deal formed the core of its Aerospace division, which has since expanded product portfolio across platforms, securing orders for metallic parts, subassemblies and wire harness across business jets and rotary wing aircraft programs . Management said Aerospace remains an excellent example of how core manufacturing, engineering and system integration capabilities can be leveraged beyond automotive into high-value adjacencies . It also said it is looking meaningfully to penetrate the semiconductor business through capabilities in aerospace because they are complementary .

Funding and path to close

The deal is cash consideration . As of June 30, 2026, Motherson had gross debt of Rs 16,606 crore and liquidity of Rs 15,633 crore . Within that liquidity, unrestricted cash and cash equivalents stood at Rs 8,606 crore . Effective net debt was Rs 9,811 crore as of March 2026 . The net leverage ratio reached its lowest ever level at 0.8 times as of June 30, 2026 . That sits within the financial policy ceiling of 2.5 times and internal aspiration of staying below 1.5 times .

As of March 31, 2026, consolidated cash and equivalents stood at Rs 7,515.82 crore, total borrowings at Rs 15,894.93 crore, resulting in net debt of Rs 8,379.11 crore and a debt to equity ratio of 0.36 times .

Historically, Motherson has funded acquisitions of similar size using cash from its own operations and by issuing corporate guarantees so its subsidiaries can borrow from banks . Its stated funding policy is to keep its net leverage ratio below 1.5 times with a hard ceiling of 2.5 times and to use its strong cash flow generation to fund growth while maintaining financial discipline .

Closing depends on conditions precedent . Past acquisitions typically include conditions such as obtaining regulatory approvals, receiving exemptions from takeover panels, completing corporate registrations, and satisfying other customary closing conditions . These conditions have generally been satisfied, as shown by completed deals like Nexans Autoelectric, Yutaka Giken, Vacuform, and Nissin India. Some acquisitions have seen delays in meeting conditions, such as the HR Dhauliganga power deal pushed to the fourth quarter of FY27 and the Yutaka Giken and Vacuform acquisitions pushed from the first quarter to the second quarter of FY27.

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