Brazilian aerospace major Embraer will acquire a 51 per cent equity stake in Novavayu Aerospace, a step-down subsidiary of Mahindra and Mahindra, under an Investment Agreement notified by the automobile company in an exchange filing. The transaction will give Embraer control of the aerospace business.

Following completion of the acquisition, Novavayu Aerospace will cease to be a wholly owned subsidiary and become an associate of Mahindra Defence Systems, which is a step-down wholly owned subsidiary of Mahindra and Mahindra. The agreement is expected to be completed on or before December 1.

Mahindra and Mahindra said Novavayu Aerospace had not contributed any turnover, revenue, income, net worth or profit to its consolidated financial statements for the financial year ended March 31, 2026. The aerospace entity had also not generated revenue or income as of the date of the disclosure.

Mahindra Defence Systems will receive aggregate consideration of approximately Rs. 510,000 for the sale of the 51 per cent stake. The filing stated that Embraer was not related to the promoter, promoter group or group companies, and that the proposed transaction did not fall within the scope of related-party transactions.

Shares of Mahindra and Mahindra closed at Rs. 2,792.10 on the BSE on Friday, up 0.8 per cent. The stock had declined 11.36 per cent over one month and 11.85 per cent over six months, while its year-to-date fall stood at 25.78 per cent. It had recorded a 52-week high of Rs. 3,840 and a low of Rs. 2,743.15 on the exchange.