Sona Comstar sets price band of Rs 285-291/share for Rs 5,550 crore-IPO


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Auto component maker Sona BLW Precision Forgings (Sona Comstar) on Wednesday fixed a price band of Rs 285-291 a share for its Rs 5,550 crore initial public offer (IPO).

The three-day IPO will open on June 14 and conclude on June 16. The bidding for anchor investors will open on June 11, according to the company.

The Rs 5,550-crore IPO comprises 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.

Now, the size of the public issue has been reduced to Rs 5,550 crore from Rs 6,000 crore as it has been decided to offloaded Rs 5,250 crore shares through OFS against Rs 5,700 crore as planned earlier.

The Blackstone-promoted 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, 15 per cent for non-institutional bidders and 10 per cent for retail investors.

The company is into designing, manufacturing and supplying highly engineered 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.

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 company is also one of the two largest exporters of starter motors from the country besides being the largest manufacturer of differential gears for passenger vehicles, commercial vehicles and tractors in India.

Some of its key OEM customers include a global OEM of EVs, a North American passenger vehicle and commercial vehicles maker, Ashok Leyland, Daimler, Escorts, Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Volvo and Volvo Eicher.

Sona Comstar, which filed preliminary IPO papers in February, obtained Sebi’s go ahead in early May to float the public issue.

Kotak Mahindra Capital Company, Credit Suisse Securities, JP Morgan India, JM Financial and Nomura Financial Advisory and Securities are the book running lead managers of the issue.