Brazil’s Embraer SA signed an Investment Agreement on 9 October 2026 to acquire a 51% controlling stake in Novavayu Aerospace Ltd, the newly formed aerospace arm of Mahindra Defence Systems. The Embraer Mahindra partnership creates a joint venture base in India for the C-390 Millennium bid for the Indian Air Force medium transport aircraft programme. With Nagpur identified for a final assembly line and completion targeted by 1 December 2026, the deal directly supports Make in India manufacturing and maintenance goals.
What Is the Embraer Mahindra Partnership Agreement?
The Embraer Mahindra partnership is structured as an Investment Agreement signed on 9 October 2026 between Embraer SA of Brazil and Mahindra Defence Systems Ltd (MDSL). Mahindra and Mahindra Ltd disclosed the agreement to the stock exchanges on the same day under disclosure norms for listed companies. Under the agreement, Embraer will acquire a 51% equity stake in Novavayu Aerospace Limited, while MDSL will retain 49%.
The agreed consideration is strikingly small at about ₹5.10 lakh for the majority stake. The low value reflects the fact that Novavayu Aerospace is a brand new company with no factory, no revenue and no accumulated profits. Novavayu Aerospace Limited was incorporated in India on 29 July 2026 with its registered office in Mumbai, Maharashtra. Its stated business is the manufacture of aircraft and aerospace products and related services for the defence industry, with an authorised share capital of ₹1 crore.
The ownership chain is important to understand. Novavayu Aerospace is a wholly owned subsidiary of MDSL. MDSL is a wholly owned subsidiary of Mahindra Advanced Technologies Ltd, which in turn is wholly owned by Mahindra and Mahindra Ltd. After Embraer completes the purchase on or before 1 December 2026, Novavayu will cease to be a wholly owned subsidiary and will become an associate company of MDSL. Mahindra has clarified that the transaction is not a related party deal, as Embraer has no link to its promoter group.
| Deal Element | Verified Detail |
|---|---|
| Buyer | Embraer SA, Brazil |
| Seller | Mahindra Defence Systems Ltd |
| Target company | Novavayu Aerospace Ltd, Mumbai |
| Stake to be acquired | 51% controlling stake |
| Consideration | About ₹5,10,000 |
| Agreement date | 9 October 2026 |
| Expected completion | On or before 1 December 2026 |
| Current status of Novavayu | Incorporated 29 July 2026, no revenue as yet |
What Is Embraer and Is It a Brazilian Company?
Embraer SA is Brazil’s leading aerospace manufacturer headquartered in São José dos Campos, São Paulo. Founded on 19 August 1969 and privatised in 1994, it designs commercial, executive, defence and agricultural aircraft and ranks among the world’s top regional jet makers with over 9,000 aircraft delivered.
The full name, Empresa Brasileira de Aeronautica, means Brazilian Aeronautics Company. Embraer was set up by the Brazilian government under founder Ozires Silva to build domestic aerospace strength, with the Brazilian Air Force as its first major customer. It was privatised in 1994 and is now a listed company traded in Brazil and New York. Its headquarters remain in São José dos Campos in the state of São Paulo, with offices and plants in the United States, Portugal, Singapore and other countries.
Embraer is not owned by Boeing. The two companies had planned a joint venture for commercial aircraft in 2018, but Boeing cancelled the deal in April 2020. Embraer has remained independent since then. Francisco Gomes Neto is the President and Chief Executive Officer of Embraer (as of October 2026).
The Embraer aircraft portfolio explains why the company matters for India. Its E-Jet family, including the E175, E190 and E195, along with the newer E2 series, serves regional airlines across the world. Its executive jets include the light Phenom 100 and the best selling Phenom 300. Its defence flagship is the C-390 Millennium military transport aircraft. India already uses Embraer platforms. The Indian Air Force uses ERJ-145 jets as the base for the Netra airborne early warning system, and uses Legacy 600 aircraft for VIP movement.
What Does Mahindra Defence Systems Do?
Mahindra Defence Systems Ltd is the defence and aerospace arm of Mahindra and Mahindra Ltd. Based in India and formed in the mid 2000s, it makes armoured vehicles, aerospace structures and defence systems and partners with global firms for manufacturing, maintenance and technology transfer.
MDSL works with international partners to supply land systems, naval systems and aerospace products. Its land portfolio includes armoured vehicles for the Army and paramilitary forces, along with specialised protection and surveillance equipment. In aerospace, the wider Mahindra group has built a strong components base over the past fifteen years. Mahindra Aerospace, set up in 2010, and Mahindra Aerostructures operate a large plant near Bengaluru in Karnataka. The plant builds aircraft parts, sub assemblies and major structures for global aircraft makers.
Novavayu Aerospace marks a shift from parts to full platforms. Mahindra has stated that the new company will design aircraft independently, assemble aircraft with foreign partners and make major structures for existing partners. Novavayu Aerospace Limited is not a listed company. It is an unlisted private company, first created as a step down wholly owned subsidiary within the Mahindra group, so it has no separate share price or stock listing.
Why Nagpur and the C-390 Millennium Are Central to the Deal
The Embraer Mahindra C-390 India plan is the real driver behind the Novavayu stake purchase. Embraer and Mahindra signed an early Memorandum of Understanding in February 2024 and then entered a Strategic Cooperation Agreement in October 2025 to jointly offer the C-390 Millennium for the Indian Air Force Medium Transport Aircraft (MTA) programme. In February 2026, the two companies announced plans to set up Maintenance, Repair and Overhaul (MRO) capability in India for the C-390 if the aircraft is selected. MRO means the full system of servicing, repair and long term upkeep that keeps a military fleet flying.
On 1 October 2026, Embraer and Mahindra announced that they had identified Nagpur in Maharashtra as the location for a potential Final Assembly Line for the C-390 in India. The Maharashtra government has supported the plan with land allotment and related clearances. The proposed plant would handle aircraft assembly, systems integration, manufacturing engineering and supply chain development. The facility will only be built if the Government of India selects the C-390 and places an order under the MTA programme.
The C-390 Millennium is a twin engine jet powered military transport aircraft. It is the heaviest aircraft Embraer has built. It can carry troops, cargo, vehicles and even a helicopter such as the Black Hawk class. It can take off and land on short or unpaved runways, which matters for high altitude landing grounds in Ladakh and the Northeast. It can also work as an air to air refuelling tanker and receiver, and can be fitted for medical evacuation, search and rescue, firefighting and humanitarian aid.
| C-390 Millennium Feature | Verified Specification |
|---|---|
| Maximum concentrated payload | 26 metric tonnes |
| Maximum distributed payload | 23 metric tonnes |
| Cruise speed | 470 knots (about 870 kmph, Mach 0.80) |
| Range with 26 tonne load | 1,080 nautical miles (about 2,000 km) |
| Range with 23 tonne load | 1,470 nautical miles (about 2,720 km) |
| Ferry range | 3,370 nautical miles, higher with extra tanks |
| Troop and paratroop capacity | Up to 80 troops or 64 paratroopers |
| Engines | Two IAE V2500 turbofans |
The Indian Air Force link gives the deal its scale. The Defence Ministry issued a Request for Information in early 2023 for an airlifter able to carry 18 to 30 tonnes, to replace the ageing Antonov An-32 fleet of around 97 aircraft. On 12 August 2026, the Ministry issued a formal tender for 60 multirole transport aircraft worth about ₹1 lakh crore (about $10 billion to $12 billion). The tender requires at least 40% indigenous content, rising to 60% over time. If selected, Embraer and Mahindra plan to build local manufacturing, train Indian suppliers and position India as a future regional MRO hub for other C-390 operators.
How Does the C-390 Millennium Compare With Its Rivals?
The Indian Air Force transport aircraft contest is mainly a three way race. Embraer offers the C-390 Millennium with Mahindra. Lockheed Martin offers the C-130J Super Hercules with Tata. Airbus offers the larger A400M Atlas. The table below sets out the core differences that matter for the 60 aircraft MTA tender.
| Feature | Embraer C-390 Millennium (with Mahindra) | Lockheed Martin C-130J Super Hercules (with Tata) | Airbus A400M Atlas |
|---|---|---|---|
| Engine type | Twin jet engines | Four turboprop engines | Four turboprop engines |
| Maximum payload | 26 tonnes | About 20 to 21.7 tonnes | About 37 tonnes |
| Cruise speed | About 870 kmph | About 657 kmph | About 780 kmph |
| Runway ability | Short and unpaved strips | Proven rough field record, suits high altitude grounds | Short and unpaved strips |
| Fleet commonality for India | Builds on Netra and Legacy experience | India already flies 12 C-130Js, easier training and spares | No current Indian fleet |
| Cost and size fit | Jet speed with lower lifecycle cost, fits 18 to 30 tonne band | Proven but smaller payload | Largest payload but highest cost, may exceed budget |
The C-390 pitches itself as the middle path. It carries more than the C-130J and flies 25 to 30 percent faster because it uses jets rather than propellers. The C-130J pitches continuity, since Indian pilots and ground crews already know the aircraft. The A400M pitches maximum lift, but its price and size place it at the upper edge of the requirement. Embraer has said India could become the largest C-390 operator in the world and a production hub for exports to the Indo Pacific if the Indian Air Force places a 40 to 80 aircraft class order.
Significance for Make in India and Defence Manufacturing
The Novavayu deal fits directly into the Make in India and Atmanirbhar Bharat push in defence. The Defence Acquisition Procedure 2020 gives top priority to the Buy (Indian Indigenously Designed, Developed and Manufactured) category, which needs at least 50% indigenous content. A newer category, Buy (Global, Manufacture in India), allows a foreign maker to build through its Indian subsidiary with at least 50% local content. The Novavayu joint venture gives Embraer exactly that kind of Indian base.
India now allows Foreign Direct Investment up to 74% through the automatic route in defence manufacturing, and up to 100% with government approval where advanced technology comes in. A 51% foreign holding with an Indian partner is therefore fully within policy and gives the foreign firm comfort on technology control while keeping manufacturing and jobs in India. The venture is also expected to build design skills, a local supplier network and a full maintenance ecosystem, which are formal conditions for such joint ventures.
For India, the gains go beyond one aircraft order. Local assembly in Nagpur would bring aircraft integration knowhow, training systems and lifecycle support that the Air Force needs for decades. Indian suppliers would join the global C-390 supply chain. The MRO facility would cut dependence on foreign repair centres and improve fleet availability. Together, these steps move Mahindra from a parts supplier to a platform level aerospace firm, and move India closer to the goal of making and maintaining its own military airlifters.
Key Takeaways
- Embraer SA signed an Investment Agreement on 9 October 2026 to acquire a 51% controlling stake in Novavayu Aerospace Ltd from Mahindra Defence Systems.
- Novavayu Aerospace was incorporated on 29 July 2026 in Mumbai with ₹1 crore authorised capital and has reported no revenue so far.
- The deal is expected to close on or before 1 December 2026 for consideration of about ₹5.10 lakh, after which Novavayu will become an associate of Mahindra Defence Systems.
- Embraer and Mahindra have identified Nagpur, Maharashtra for a potential C-390 Millennium Final Assembly Line and MRO facility if the aircraft wins the Indian Air Force order.
- The Defence Ministry tender of 12 August 2026 seeks 60 medium transport aircraft worth about ₹1 lakh crore to replace the Antonov An-32 fleet, with the 26 tonne payload C-390 competing against the C-130J and A400M.
