Gravita Acquires Rashtriya Metals Industries for ₹565 Crore

Why It Matters

The acquisition diversifies Gravita’s portfolio into high‑growth copper recycling while scaling sustainable lead and battery‑recycling operations, positioning the company to capture rising demand for circular‑economy metals.

Key Takeaways

• Acquired RMIL for ₹565 crore, adding copper capacity
• Copper capacity rises to 340 ktpa, 45 ktpa by Q2 FY27
• Lead‑recycling capacity now 145,100 tpa after ₹49 crore spend
• Launched 6,000 tpa lithium‑battery plant in Mundra
• Target price ₹2,000 implies 28× FY28E EPS

Pulse Analysis

Gravita’s strategic purchase of Rashtriya Metals Industries Limited (RMIL) signals a decisive shift toward integrated metal recycling. By absorbing one of India’s oldest copper manufacturers, Gravita not only adds 6 ktpa of copper processing but also gains access to RMIL’s established scrap channels. This vertical integration aligns with global trends where primary metal producers are securing downstream recycling assets to hedge against volatile raw‑material prices and tightening environmental regulations. The timing dovetails with India’s push for domestic copper supply, reducing reliance on imports and enhancing supply‑chain resilience.

Beyond copper, Gravita is accelerating its lead‑recycling footprint, expanding capacity to 145,100 tpa—a move that addresses the burgeoning demand for lead in batteries and construction. The simultaneous launch of a 6,000‑tpa lithium‑ion battery‑recycling plant in Mundra taps into the electric‑vehicle surge and the newly enforced Battery Waste Management Rules. These initiatives benefit from extended producer responsibility (EPR) frameworks and the Reverse Charge Mechanism, which incentivize manufacturers to source recycled inputs. As scrap availability improves under supportive policies, Gravita’s diversified recycling portfolio positions it to capture higher margins from value‑added products (VAPs) projected to contribute half of its revenue by FY29.

From an investment perspective, Gravita trades at a premium 33×/27× FY27E/FY28E earnings multiple, reflecting confidence in its growth trajectory. The ₹2,000 price target, equating to 28× FY28E EPS, incorporates the incremental copper capacity, lead‑recycling scale‑up, and battery‑recycling upside. Risks remain tied to regulatory shifts and global aluminium price volatility, which could affect scrap supply. Nonetheless, the company’s robust capital allocation, policy tailwinds, and clear roadmap toward sustainable metal solutions make the Buy recommendation compelling for investors seeking exposure to India’s circular‑economy transition.

Deal Summary

Gravita has completed the acquisition of Rashtriya Metals Industries Limited (RMIL) for ₹565 crore, expanding its copper recycling capacity from 334 ktpa to 340 ktpa. The deal marks Gravita's entry into copper recycling and adds to its lead‑recycling and lithium‑ion battery‑recycling operations.