Updated: June 14, 2021 1:26:23 pm
Sona Comstar IPO: The initial public offering (IPO) of Sona BLW Precision Forgings (Sona Comstar) has opened for subscription earlier today and will be available for subscription till Wednesday, June 16, 2021. The IPO has a price band of Rs 285-291 per share.
Ahead of its Rs 5,550 crore IPO, Sona Comstar raised Rs 2,497.5 crore from 56 anchor investors in lieu of 8,58,24,742 equity shares at Rs 291 each, data from the stock exchanges showed.
The anchor investors include the likes of Government of Singapore, Monetary Authority of Singapore, SBI Mutual Fund, Axis Mutual Fund, Aditya Birla Sun Life Mutual Fund, Nomura India Investment Fund Mother Fund among others, the company’s circular on the BSE showed.
Sona BLW Precision Forgings is an auto component maker that is backed by private equity investment firm Blackstone. It supplies components to automotive original equipment manufacturers (OEMs) across the US, Europe, India and China, for both electrified and non-electrified powertrain segments and is not dependent on a single product, vehicle segment, customer, or geography.
The Sona Comstar IPO comprises a fresh issue of shares amounting to Rs 300 crore and an offer for sale (OFS) aggregating up to Rs 5,250 crore by selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of the Blackstone Group Inc.
The company intends to utilise the proceeds from the fresh issue to repay/prepay a little over Rs 241 crore of its borrowings besides general corporate purposes.
A total of 75 per cent of the issue has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional bidders and 10 per cent for retail investors.
Investors who wish to subscribe to Sona Comstar IPO can bid in the lot of 51 equity shares and multiples thereof. At the upper price band, they will have to shell out Rs 14,841 to get a single lot of Sona BLW Precision Forgings. The shares will be listed on both BSE and National Stock Exchange (NSE).
Kotak Mahindra Capital, JP Morgan India, Credit Suisse Securities (India), JM Financial, Nomura Financial Advsiory and Securities (India) are the book running lead managers to the IPO while Kfin Technologies is the registrar of the issue.
Many research teams of brokerages have not rated the issue however Motilal Oswal Financial Services and ICICI Direct Research in their respective IPO notes have recommended “Subscribe for long term” to the offer.
“We like SBPFL given its presence in fast growing global EV market, diversified portfolio across categories and robust financials. The issue is valued at 74.1x FY21 P/E on post issue basis. Though the valuation appears fully priced in, given its thrust in fast evolving EV space both in India and globally, market would like to give premium to such emerging growth story. Hence, we recommend Subscribe for Long Term,” the Motilal Oswal report said.
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