Embraer to Acquire 51% Stake in Mahindra’s Novavayu Aerospace as India-Brazil Defence Partnership Expands

Brazilian aerospace manufacturer Embraer S.A. has signed an agreement to acquire a 51% equity stake in Novavayu Aerospace Limited, a subsidiary of Mahindra Defence Systems Limited, marking a new development in India-Brazil aerospace cooperation. The transaction comes as Embraer and the Mahindra Group expand their partnership to pursue the Indian Air Force’s Medium Transport Aircraft (MTA) programme with the C-390 Millennium.

Mahindra & Mahindra disclosed the agreement to stock exchanges following its execution on October 9, 2026. The proposed transaction will give Embraer majority ownership of Novavayu Aerospace, while Mahindra Defence Systems will retain a 49% stake. The companies expect to complete the transaction on or before December 1, 2026.

The equity agreement follows the announcement on October 1 that Embraer and Mahindra had identified Nagpur, Maharashtra, as the proposed location for a C-390 Millennium final assembly line, subject to the aircraft’s selection by the Indian Air Force.

Embraer to Become Majority Shareholder in Novavayu Aerospace

Novavayu Aerospace Limited was incorporated on July 29, 2026, as a wholly owned subsidiary of Mahindra Defence Systems Limited (MDSL). The company forms part of Mahindra & Mahindra’s defence and aerospace business structure through Mahindra Advanced Technologies Limited.

Under the investment agreement, Mahindra Defence Systems will transfer a 51% equity stake in Novavayu to Embraer. Following completion, Novavayu will cease to be a wholly owned Mahindra subsidiary and become an associate company of MDSL.

The disclosed consideration for the transaction is approximately ₹5.10 lakh, reflecting the acquisition of shares in a recently incorporated company. Novavayu had not generated revenue or income at the time of the disclosure.

The transaction establishes a majority-owned Indian corporate entity involving Embraer and Mahindra. However, the regulatory disclosure does not explicitly identify Novavayu as the manufacturing company for the C-390 Millennium or specify its future operational responsibilities.

Partnership Builds on India-Brazil C-390 Millennium Cooperation

The latest agreement follows a series of developments in the aerospace partnership between Embraer and Mahindra.

The companies initially signed a Memorandum of Understanding in February 2024 to explore cooperation on the C-390 Millennium for the Indian Air Force. They subsequently expanded their engagement through a Strategic Cooperation Agreement signed in New Delhi on October 17, 2025.

That agreement established a broader framework covering industrialisation, local manufacturing, aircraft assembly, supply-chain development and maintenance support. The partnership seeks to combine Embraer’s aircraft design and manufacturing experience with Mahindra’s industrial presence and defence sector capabilities in India.

In February 2026, both companies announced plans to explore maintenance, repair and overhaul (MRO) capabilities for the C-390 in India. The proposed facilities would support the aircraft’s long-term operational requirements, including maintenance services and technical support, subject to its selection under the MTA programme.

The October 2026 equity transaction adds a corporate dimension to this relationship as the two groups continue developing their aerospace cooperation in India.

Nagpur Identified for Potential C-390 Final Assembly Line

On October 1, 2026, Embraer and Mahindra announced that they had identified Nagpur in Maharashtra as the proposed location for a C-390 Millennium final assembly facility. The companies are working with the Government of Maharashtra to evaluate the industrial infrastructure and support ecosystem needed for aircraft manufacturing.

The proposed facility forms part of a wider industrialisation plan covering aircraft assembly, component manufacturing, supplier development, maintenance services and technical training. Both partners have expressed their intention to develop an Indian aerospace supply chain capable of supporting the C-390 programme.

However, the manufacturing proposal remains dependent on the Indian Air Force selecting the C-390 under its Medium Transport Aircraft procurement programme. Neither the identification of Nagpur nor the latest equity agreement represents confirmation of an aircraft order or an approved production facility.

The proposed development nevertheless places Maharashtra within the companies’ long-term industrial planning for military aviation and could create opportunities for Indian aerospace manufacturers, component suppliers and engineering service providers.

C-390 Millennium Competes for Indian Air Force’s Medium Transport Aircraft Programme

The Embraer C-390 Millennium is a twin-engine, jet-powered military transport aircraft designed for tactical and logistical operations. It can transport military personnel, vehicles, equipment and supplies while supporting a range of specialised missions.

According to Embraer, the aircraft offers a maximum payload capacity of 26 tonnes and can operate from temporary or unpaved runways. Its multi-mission capabilities include cargo transport, troop movement, airdrop operations, medical evacuation, search and rescue, humanitarian assistance and aerial firefighting.

The aircraft’s jet-powered configuration distinguishes it from conventional turboprop military transports. It is designed to combine high-speed transit with the ability to conduct tactical airlift operations in demanding environments.

The C-390 is one of the aircraft being positioned for the Indian Air Force’s MTA requirement. The programme seeks to address India’s future medium-airlift needs, with industrial participation and long-term maintenance support forming important considerations in the competing proposals.

Local Manufacturing Could Expand India’s Aerospace Industrial Base

Embraer’s cooperation with Mahindra presents an opportunity to broaden India’s participation in international military aircraft manufacturing.

The proposed industrial ecosystem extends beyond assembling complete aircraft. It envisages opportunities in precision engineering, aircraft structures, avionics integration, systems support, maintenance and technical services.

Indian companies participating in such programmes can gain experience with international aerospace manufacturing standards, quality assurance systems and advanced production processes. Developing a domestic supplier network would also allow a greater proportion of manufacturing and maintenance activities to take place within India.

An established C-390 industrial base could support specialised employment, workforce training and future aerospace exports. The scale of these opportunities will depend on the aircraft programme’s outcome and the industrial commitments eventually agreed upon by the partners.

The initiative is aligned with India’s Make in India and Atmanirbhar Bharat objectives, which encourage domestic defence production, industrial partnerships and the development of advanced manufacturing capabilities.

Corporate Agreement Adds a New Dimension to India-Brazil Defence Relations

India and Brazil have been expanding their engagement in defence manufacturing, advanced technologies and industrial cooperation. Embraer’s partnership with Mahindra represents a significant example of this relationship moving towards a more structured corporate arrangement.

Brazil brings established expertise in military and commercial aircraft development through Embraer, while India offers a large defence market, growing aerospace manufacturing capabilities and an expanding network of private-sector suppliers.

The proposed Novavayu ownership structure gives both companies a direct commercial interest in an Indian aerospace enterprise. The specific activities of this entity will become clearer as the partners disclose its operational plans and investment commitments.

Importantly, the acquisition concerns a newly incorporated subsidiary rather than Mahindra’s existing aerospace manufacturing operations. Its immediate financial scale is modest, but the agreement arrives during a period of expanding cooperation between the two industrial groups.

A Further Step Towards India’s Defence Aerospace Ambitions

The proposed acquisition of a 51% stake in Novavayu Aerospace marks another development in the relationship between Embraer and Mahindra. It follows their strategic cooperation agreement, discussions on maintenance capabilities and identification of Nagpur for a potential C-390 assembly facility.

The next milestones include completion of the equity transaction, clarification of Novavayu’s business activities and progress in the Indian Air Force’s Medium Transport Aircraft procurement process.

The Embraer-Mahindra partnership reflects the growing role of Indian private industry in international defence aerospace programmes. By combining global aircraft manufacturing expertise with India’s industrial capabilities, the cooperation contributes to the country’s broader ambition of developing a competitive and technologically advanced aerospace manufacturing ecosystem.

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References

1. Mahindra & Mahindra Limited — Stock Exchange Disclosure, October 9, 2026. Announcement under Regulation 30 of SEBI Listing Regulations concerning the proposed sale of 51% equity in Novavayu Aerospace Limited to Embraer S.A.
   https://www.nseindia.com/
2. Mahindra Group, October 1, 2026 — Mahindra Group and Embraer Advance Plans for C-390 Millennium Industrialization in India; Identify Nagpur as the Location for Assembly Facility, if Selected.
   https://www.mahindra.com/news-room/press-release/en/mahindra-group-and-embraer-advance-plans-for-c-390-millennium-industrialization-in-india-identify-nagpur-as-the-location-for-assembly-facility-if-selected
3. Embraer, October 1, 2026 — Embraer and Mahindra Group Advance Plans for C-390 Millennium Industrialization in India.
   https://www.embraer.com/media-center/en/?detail=32843-Embraer-and-Mahindra-Group-Advance-Plans-for-C-390-Millennium-Industrialization-in-India%3B-Identify-Nagpur-as-the-Location-for-Assembly-Facility%2C-if-selected&mediatype=NEWS
4. Mahindra Group, October 17, 2025 — Embraer and Mahindra Group Forge Strategic Alliance to Introduce the C-390 Millennium to India.
   https://www.mahindra.com/sites/default/files/2025-10/SEIntimationEmbrarerandMahindrasignAgreement17thOctober2025.pdf
5. Embraer — Defence and Security — Official information on the C-390 Millennium military transport aircraft.
   https://www.embraer.com/

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