ZF International UK i.e. the principal shareholder (promoter group) of Wabco India
(WIL) proposes to sell up to 3.43 million shares or 18.1 per cent stake (including green-shoe option) in WIL to comply with minimum public shareholding norms. The promoter group intends to reduce its stake in WIL from 93.1 per cent to 75 per cent post the OFS.
WIL is a leader in the Indian CV braking space with a diversified presence across clients and channels i.e., OEM, aftermarket and exports. The company’s status as a technology pioneer (over the years, it has been the first to introduce ABS, AMT, ESC, ADAS, etc, to the Indian CV market) and complete solutions provider has led to substantial outperformance vis-à-vis industry, translating into ever-increasing content per vehicle.
According to Wabco India, a well thought out vehicle scrappage policy with incentives is likely to spur demand for commercial vehicles in the short to medium-term. Adoption of digital connectivity solutions will make fleets more efficient and cost-effective, it said.
"The government's FAME-II scheme has led to an increase in the adoption of electric buses in the country and it can make a significant budget allocation to the Ministry of Urban Development to support State Transport Undertakings in procuring buses with other fuels like CNG, diesel, biofuel etc. This would also lead to reviving demand for commercial vehicles," the company said in its FY20 annual report.
Analysts at ICICI Securities hold a positive view on WIL amidst the cyclical upturn in its user segments i.e. Commercial Vehicles, promoter’s intent to increase global sourcing from its Indian arm and wider product basket post the global acquisition of its erstwhile parent by ZF group. Henceforth, we recommend investors to subscribe to the upcoming OFS, the brokerage firm said in a note.
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