Blackstone-backed Sona BLW Precision Forgings gets SEBI nod for IPO; plans to raise Rs 6,000 crore

By: |
May 11, 2021 11:06 AM

Sona BLW Precision Forging Limited is one of India’s leading automotive technology companies.

Sona Comstar, IPOAnalysts expect up to 25 per cent listing gains in Sona Comstar on debut day.

Auto component maker Sona BLW Precision Forgings (Sona Comstar) has received capital market regulator SEBI’s (Securities and Exchange Board of India ) nod for its initial public offering (IPO). The company plans to raise Rs 6,000 crore through the initial share sale which will consist of a fresh issue of equity shares worth Rs 300 crore and an offer for sale (OFS) by existing shareholders. Singapore VII TOPCO III PTE — an affiliate of The Blackstone Group — is one of the promoters of the company. Sona Comstar had filed draft papers for its initial share sale with SEBI in February this year.

Through the IPO, Blackstone Group will cut its stake in the company which currently stands at 66.28%. Sona Comstar intends on using the proceeds from the fresh issue towards repayment or pre-payment, in full or part, of certain borrowings availed by the company. The offer document states that Sona Comstar’s IPO will have 75% of the issue reserved for Qualified Institutional Buyers (QIB), while the non-institutional investors (NII) portion will be 15% and the remaining 10% will be reserved for the retail investors. Kotak Mahindra Capital Company, Credit Suisse Securities, JP Morgan India, JM Financial and Nomura Financial Advisory and Securities are the book running lead managers (BRLM) of the issue.

Sona BLW Precision Forging Limited is one of India’s leading automotive technology companies. The company designs, manufactures and supplies highly engineered, mission-critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors, and motor control units to automotive OEMs across the US, Europe, India and China. Some of the company’s OEM customers include Ashok Leyland, CNH, Daimler, Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere, Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Revolt Intellicorp, TAFE, Volvo Cars and Volvo Eicher.

On the financial side, the company has seen its profits increase from Rs 77.57 crore in the financial year 2018 to Rs 360 crore in the financial year 2020. In the nine months ended December 2020, the net profit of the company stood at Rs 155 crore. Sona Comstar will join peers such as Motherson Sumi and Bosch on the bourse after a successful listing.

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