Mahindra to sell majority stake in aerospace subsidiary to Brazil's Embraer for Rs 5,100 crore

Mahindra & Mahindra Ltd (M&M) on Friday entered an agreement to sell a 51% equity stake in Novavaayu Aerospace Ltd (NAL), to Brazil-based Embraer SA for approximately Rs 5,100 crore.

Mahindra received an intimation regarding the execution of an investment agreement with Embraer, under which the Brazilian company will acquire the 51% stake in its step-down wholly owned subsidiary NAL, it said in a regulatory filing.

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Following the acquisition, NAL will cease to be a wholly owned subsidiary of M&M and become an associate of Mahindra Defence Systems Ltd (MDSL).

The transaction is expected to be completed on or before December 1, 2026, according to the filing.

NAL was incorporated on March 29, 2026, as a wholly owned subsidiary of Mahindra Defence Systems Ltd, which is itself a wholly owned subsidiary of M&M.

M&M also clarified that the proposed transaction does not fall within the ambit of related-party transactions. The company said the sale is not a slump sale and does not involve amalgamation or merger.