Carlyle is preparing to make a landmark investment in India’s defence technology sector by acquiring a controlling stake in Micropack, Economic Times reported.

The deal is valued at ₹1,175 crore, equivalent to $125 million, and represents the first major acquisition in this space by a global private equity giant. The move underscores the growing attraction of India’s defence manufacturing ecosystem for international investors.

The acquisition will see Carlyle initially purchase 60 per cent of Micropack, with provisions to gradually reduce its holding depending on financial milestones, while retaining at least 51 per cent. The remaining equity will stay with the current management, led by founder and managing director V Sreekar Reddy. This structure ensures continuity while enabling Carlyle to scale operations.

Micropack, headquartered in Bangalore, is a leading producer of printed circuit boards. Its products serve critical sectors including defence, space, avionics, telecom, medical, and industrial electronics. Defence and avionics remain its most important segments, with key clients such as ISRO, DRDO, and Data Patterns.

The company reported revenues of ₹250 crore in FY26 and an EBITDA of ₹100 crore, building on steady growth between FY21 and FY25, when revenues rose 20 per cent and profits advanced 29 per cent.

The Carlyle-led consortium includes Yali Capital, a venture capital fund specialising in deep tech areas such as semiconductors, robotics, genomics, aerospace, and AI.

Also joining is Mathew Cyriac of Florintree, a prominent investor in India’s defence equipment sector. Their participation highlights the increasing convergence of private equity and venture capital in backing advanced hardware and defence technologies.

Globally, Carlyle has a long track record of investing in defence and industrial infrastructure companies, having deployed $12 billion across firms such as Booz Allen Hamilton, StandardAero, Two Six Technologies, Loc Performance, Allison Transmission, and Axalta.

Earlier this year, Carlyle launched a dedicated aerospace, defence, and industrials investment unit to capitalise on rising military spending and resilient supply chain requirements. Retired General Bryan Fenton, former head of US Special Operations Command, has joined Carlyle as an operating executive to support these initiatives.

India’s defence spending continues to expand, with the FY27 budget reaching ₹7.85 lakh crore. Capital expenditure has grown sharply from ₹94,587.95 crore in FY15 to ₹2.19 lakh crore in FY27, reflecting the government’s commitment to modernisation and self-reliance.

Defence technology funding has also surged, with 2025 recording the highest-ever annual inflow of $247 million, taking cumulative funding to $711 million. Programmes such as Innovations for Defence Excellence (IDEX) and import restrictions have further boosted domestic start-ups and suppliers.

Micropack’s acquisition comes at a time when technologies developed for military applications are increasingly finding commercial uses in sectors such as autonomous vehicles, precision agriculture, telecommunications, and enterprise security.

This dual-use potential is driving investor interest and positioning India’s defence technology sector as a growth engine. A recent Inc42 survey confirmed advanced hardware and technology as a leading investment theme, second only to AI.

The Carlyle consortium’s bet on Micropack is therefore both strategic and symbolic. It signals confidence in India’s defence manufacturing capabilities, strengthens indigenous supply chains, and aligns with the government’s Atmanirbhar Bharat vision.

For Micropack, the deal promises fresh capital, global expertise, and expanded opportunities in both domestic and international markets.

Agencies