Auto parts supplier Sona Comstar to launch Rs 5,550-crore IPO next week

Topics Auto parts | IPO

IPO
Automotive Supplier Sona Comstar will launch its Rs 5,550-crore initial public offer (IPO) next week. The company has priced the offer at Rs 285–291  per share. The IPO will remain open between June 14 to June 16, and anchor investors will be allotted shares on Friday. The issue consists of a fresh sale of Rs 300 crore and an offer for sale (OFS) worth Rs 5,250 crore, of shares held by Singapore Topco, an affiliate of the Blackstone group. Singapore Topco's current holding stands at 66.2 per cent of the pre-offer paid-up equity capital of the company.

Sona Comstar was planning to raise Rs 6,000 crore earlier, but Singapore Topco decided to reduce the OFS portion. Post-offer, the firm will hold a little over 33 per cent in the company.

The company intends to use the proceeds from the fresh issue to repay Rs 241 crore of borrowings.

Sona Comstar designs, manufactures, and supplies automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors. And motor control units to automotive OEMs across the US, Europe, India and China.

The company has nine manufacturing and assembly facilities across India, China, Mexico and the US, of which six are located in India.

Kotak Mahindra Capital, Credit Suisse Securities India, JM Financial, JP Morgan India and Nomura Financial Advisory and Securities (India)  are the issue managers.

The IPOs of SMEL and Sona Comstar will end the IPO drought of the past two months. The last IPO to hit the market was that of Marcotech Developers in April. The volatility in the market after the second wave of Covid-19 had made companies defer their listing plans. However, the rebound since May has helped some of the companies to revive their plans.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel