Embraer will acquire a 51% stake in Novavayu Aerospace Limited, a newly established Indian company controlled by Mahindra Defence Systems, as the Brazilian aircraft manufacturer expands its partnership with Mahindra in India's military transport aircraft 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%.
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The transaction is expected to be completed by December 1, subject to the conditions established in the investment agreement.
Novavayu is not an established aerospace manufacturer being acquired by Embraer. The company was incorporated on July 29, 2026, with an initial capital of INR1 million (US$11,200), and has yet to record operating revenue.
The small value of the transaction reflects the company's recent creation rather than the acquisition of existing industrial assets. Mahindra has not disclosed what assets or operations will eventually be transferred to Novavayu.
New company emerges amid C-390 campaign
The agreement comes as Embraer and Mahindra Defence Systems compete for India's Medium Transport Aircraft (MTA) program with the C-390 Millennium, Embraer's military transport jet capable of carrying up to 26 metric tons of payload.
The Indian Air Force is evaluating a new medium transport aircraft to complement and eventually replace older aircraft in its fleet. The requirement has attracted Embraer with the C-390 and Lockheed Martin with the C-130J Super Hercules.
Embraer and Mahindra have gradually expanded their cooperation around the C-390 campaign. The companies signed their initial memorandum of understanding in 2024 and have since outlined plans for local manufacturing, supply-chain development and maintenance capabilities if the aircraft is selected.
In February, the partners announced plans to establish maintenance, repair and overhaul (MRO) capabilities for the C-390 in India. The facility would support Indian aircraft and could eventually serve other operators in the region.
Nagpur selected for assembly if C-390 wins
Earlier this month, Embraer and Mahindra selected Nagpur, in the state of Maharashtra, as the location for a C-390 final assembly line if the aircraft wins the MTA competition.
The plan would bring final assembly of the Brazilian military transport to India and involve the development of a local supplier network. It remains conditional on the C-390 being selected by the Indian government and a subsequent aircraft order.
Indian authorities have cited a potential investment of INR60 billion (US$675 million) associated with the proposed industrial project in Nagpur. Embraer and Mahindra have not disclosed how that investment would be divided or committed funds of that amount.
The role Novavayu would play in this industrial structure has not been disclosed. The regulatory filing does not state whether the company would operate the proposed Nagpur assembly line, manage suppliers, provide maintenance services or assume other responsibilities under the Embraer-Mahindra partnership.
The acquisition therefore gives Embraer majority control of an Indian corporate vehicle at a time when the two companies are preparing their MTA proposal, but it does not indicate that India has selected the C-390 or authorized construction of the Nagpur assembly operation.
