Sao Paulo: Brazilian aerospace major Embraer is set to acquire a 51% controlling stake in Novavayu Aerospace Limited, a newly formed company under the Mahindra Group, strengthening the partners’ joint push for the Indian Air Force’s (IAF) Medium Transport Aircraft (MTA) programme. The investment agreement was signed on October 9, with the transaction expected to be completed by December 1, 2026.
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Under the agreement, Mahindra Defence Systems Limited (MDSL) will retain a 49% stake in Novavayu, while Embraer will become the majority shareholder. Mahindra’s regulatory filing puts the consideration for the 51% stake at approximately ₹5.1 lakh. Novavayu was incorporated in July 2026 and has not generated revenue to date.
The move advanced the companies’ partnership around Embraer’s C-390 Millennium military transport aircraft, which they are jointly positioning for the IAF’s MTA requirement. The aircraft can carry payloads of up to 26 tonnes and perform troop and cargo transport, airdrops, medical evacuation and humanitarian missions.
The partners are also preparing for potential local manufacturing. On October 1, Embraer and Mahindra identified Nagpur, Maharashtra, as the proposed location for a final assembly line, subject to the C-390 being selected by the Indian government and an order being placed. The proposed industrial ecosystem could include aircraft assembly, systems integration, supply-chain development and maintenance, repair and overhaul capabilities.
The stake acquisition does not mean the C-390 has been selected by India. The IAF’s MTA procurement remains the decisive milestone, with the proposed assembly facility and wider manufacturing plans contingent on the outcome.
Embraer is strengthening its industrial position in India ahead of the IAF transport-aircraft competition, while local assembly and manufacturing remains conditional on selection.
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