Embraer to Take 51% Stake in Newly Formed Novavayu Aerospace as It Partners With Mahindra on India's MTA Bid
Why It MattersThe step gives Embraer majority control of an Indian vehicle ahead of the C-390 proposal, tightening its local-industrial pitch against Lockheed Martin's C-130J in a competition still undecided.
Embraer will acquire a 51% stake in Novavayu Aerospace Limited, a newly established Indian company controlled by Mahindra Defence Systems, as it expands its partnership with Mahindra in India's Medium Transport Aircraft (MTA) competition. Mahindra & Mahindra disclosed the transaction in a regulatory filing on October 9. Embraer will pay INR510,000 (US$5,700) for the stake, while Mahindra Defence Systems will retain the remaining 49%. The deal is expected to close by December 1, subject to the conditions in the investment agreement.
Novavayu was incorporated on July 29, 2026, with initial capital of INR1 million (US$11,200) and has recorded no operating revenue. The small transaction value reflects the company's recent creation rather than the purchase of existing industrial assets.
Embraer and Mahindra Defence Systems are competing in the MTA program with the C-390 Millennium, Embraer's military transport jet, which can carry up to 26 metric tons of payload. The Indian Air Force is evaluating a new medium transport aircraft to complement and eventually replace older types in its fleet, and Lockheed Martin is also competing with the C-130J Super Hercules. The two companies signed an initial memorandum of understanding in 2024 and have since outlined plans for local manufacturing, supply-chain development and maintenance capabilities if the C-390 is selected. In February they announced plans for maintenance, repair and overhaul capabilities for the C-390 in India, and earlier this month they selected Nagpur, in Maharashtra state, as the site of a C-390 final assembly line, conditional on the aircraft winning the competition and a subsequent order. The acquisition does not indicate that India has selected the C-390 or authorized construction of the Nagpur assembly operation.
