Rama Steel Tubes Limited saw its shares climb over 2% after the company revealed plans to acquire Automech Group, a leading UAE-based engineering and high-precision manufacturing firm. The total deal value stands at AED 296 million, translating to roughly ₹728 crore, marking one of the most significant strategic expansions in the company’s history.
This acquisition represents a major turning point for Rama Steel as it moves beyond its traditional steel pipes and tubes business and steps into high-value precision engineering services. The company expects the deal to strengthen its position across the GCC and MENA regions while also opening doors to advanced manufacturing opportunities.
Following the acquisition, Rama Steel anticipates its consolidated revenue to more than double by FY27, rising from ₹1,065 crore in FY25 to over ₹2,200 crore. The company also expects a substantial improvement in profitability, with EBITDA projected to jump from ₹46 crore in FY25 to an estimated ₹236 crore by FY27, backed by stronger margins and operational integration. EBITDA margins are expected to improve from around 4% to nearly 10% during this period.
Automech delivered ₹611 crore in standalone revenue and ₹101 crore in profit in FY25. With its strong credentials, including API, ASME, and ISO-certified facilities and ADNOC-approved vendor status, Automech brings access to high-margin business verticals in energy, infrastructure, marine services, and industrial components.
Rama Steel plans to leverage Automech’s capabilities by shifting part of the manufacturing chain to its Indian operations, a move expected to enhance cost efficiency and strengthen standalone performance. The company also aims to introduce world-class governance and accounting practices across Automech to ensure transparency and compliance.
The deal further opens the door for dividend and royalty inflows from Automech once the integration is complete, supporting Rama Steel’s long-term financial growth. Strategically, the acquisition positions the company for a global push into the value-added engineered products segment, marking its transition from a traditional pipes manufacturer into a high-end engineering solutions player.
As per the agreement, Rama Steel’s UAE subsidiary, RST International Trading FZE, will acquire 78.38% of Automech, while Rama Steel Tubes Limited will take up 21.62%. The company expects to close the transaction within six months, subject to customary regulatory approvals.
