MosChip Technologies Ltd, a Hyderabad-based semiconductor and product engineering services firm, has decided to acquire a 73% controlling stake in Vayavya Labs Pvt Ltd for a total consideration of ₹245.49 crore, in a move aimed at strengthening its product engineering capabilities.
About 60.50% of the consideration will be funded through internal accruals, with the balance to be settled through a share swap. The remaining 27% stake will be acquired after March 31, 2028, with valuation linked to Vayavya Labs’ business performance.
Target company profile
Founded in 2006 and headquartered in Belagavi, Vayavya Labs has established itself as a ‘Silicon-to-System’ engineering partner across sectors including semiconductors, consumer electronics, automotive, electronic design automation, communications and connectivity.
The company operates delivery centres in Belagavi and Bengaluru, providing specialised engineering services to global clients.
Scale and synergies
Post-acquisition, MosChip’s overall headcount will exceed 2,000 employees, enhancing its scale and execution capabilities.
The combined entity will serve customers from six strategic locations, Ahmedabad, Belagavi, Bengaluru, Hyderabad, Pune and Silicon Valley (US), supporting MosChip’s “Beyond Tier-1 cities” initiative to deliver technology-led solutions from Tier-2 locations.
Strategic rationale
The acquisition is expected to generate synergies through strengthened end-to-end offerings, while creating cross-sell and up-sell opportunities across key verticals such as semiconductors and automotive.
It will also enable MosChip to enhance its software-led engineering capabilities, drive top-line growth and improve EBITDA performance.
Growth outlook
The transaction is seen as a step towards moving up the value chain in product engineering solutions, while supporting geographical expansion and diversification in business development and engineering.
The acquisition of Vayavya Labs is expected to be value-accretive and aligned with MosChip’s long-term objective of building a scalable, differentiated and margin-resilient product engineering business.