MUMBAI / BENGALURU. In a landmark transaction that underscores the growing global appeal of India’s indigenous military manufacturing sector, global private equity major Carlyle has finalised an agreement to acquire a controlling interest in Micropack, a prominent supplier of high-grade electronic components for the domestic defence and aerospace industries.
The deal, valued at ₹1,175 crore (approximately $125 million), represents the first-ever acquisition of an Indian defence technology firm by a premier, bulge-bracket global private equity fund. Under the terms of the transaction, Washington DC-headquartered Carlyle will initially acquire a 60% stake upfront.
This ownership will be scaled down in phases contingent upon the company meeting specific financial milestones, though Carlyle will maintain an absolute minimum majority stake of 51%. The residual equity will remain with the existing management and founder V Sreekar Reddy, who will continue to guide operations as Managing Director.
Strong Consortium Backing
Carlyle is anchoring the transaction alongside a high-profile consortium of co-investors. This includes Yali Capital, a venture capital firm specialising in early-stage deep tech ventures across robotics, genomics, aerospace and semiconductors. Additionally, Mathew Cyriac of Florintree—widely recognised as one of the most successful individual investors in India’s fast-growing military equipment space – is part of the group, adding significant local strategic weight to the buyout.
Bengaluru-based Micropack stands as a critical pillar in India’s high-tech manufacturing grid, specialising in the production of complex printed circuit boards (PCBs) optimised for extreme environments. While the company services telecom, medical and industrial electronics clients, its primary economic driver is the defence, space and avionics segments.
Its prestigious client roster includes institutional giants such as the Indian Space Research Organisation (ISRO), the Defence Research and Development Organisation (DRDO) and prominent public-private ecosystems like Data Patterns.
Financial indicators showcase the company’s strong growth trajectory. Micropack is projected to record ₹250 crore in revenue alongside ₹100 crore in earnings before interest, taxes, depreciation and amortization (EBITDA) for the 2026 fiscal year.
Carlyle’s Global Strategic Pivot
The transaction seamlessly aligns with Carlyle’s broader institutional strategy. Globally, the fund has deployed over $12 billion across three decades into foundational aerospace and defence infrastructure companies, including household industry names like Booz Allen Hamilton and StandardAero.
Earlier this year, Carlyle established a dedicated middle-market aerospace, defence and industrials investment unit explicitly tasked with capitalising on resurgent global military expenditures and supply chain localisation trends. To strengthen this push, retired General Bryan Fenton, former commander of the US Special Operations Command, recently joined the firm to oversee asset evaluation and strategic scaling.
A Buoyant Horizon for Indian Defence Tech
The deal materialised against a backdrop of historic capital deployment in India’s national security landscape. Driven by the central government’s aggressive “Make in India” initiatives, import bans and dedicated support systems like the Innovations for Defence Excellence (iDEX) framework, capital expenditure allocations for defence have soared dramatically, reaching ₹2.19 lakh crore out of a massive overall FY27 defence budget of ₹7.85 lakh crore.
This massive addressable market is attracting historic levels of private funding. According to data from Tracxn, India’s defence technology sector achieved its highest-ever annual capital inflow of $247 million in 2025, taking the sector’s cumulative funding milestone past $711 million.
As dual-use military technologies find highly profitable commercial applications in autonomous transit and telecom, institutional appetites are poised to grow even further, setting the stage for more global deals of this magnitude.
