Sona Comstar IPO worth ₹5,550 crore to open from today

Sona Comstar IPO will open for subscription on Monday, June 14, and conclude on Wednesday, June 16, according to the company. Last week, Sona Comstar fixed a price band of ₹285-291 a share for its ₹5,550 crore initial public offer (IPO). And, the bidding for anchor investors opened on June 11.

Auto component maker Sona BLW Precision Forgings (Sona Comstar) garnered ₹2,498 crore from anchor investors ahead of its initial share sale.

Sona Comstar designs, manufactures and supplies 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 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.

Sona Comstar 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 & Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Volvo and Volvo Eicher.

Sona Comstar, which filed preliminary IPO papers in February, obtained the Securities and Exchange Board of India’s (Sebi’s) go-ahead in early May to float the public issue.

Here are the details of Sona Comstar IPO:

1. Sona Comstar has allocated a total of 8.6 crore equity shares to 42 anchor investors at ₹291 a piece, which is the upper end of the price band, according to a BSE circular uploaded late night on Friday.

2. The company has raised ₹2,498 crore, which is 45 per cent of the total IPO size of ₹5,550 crore.

3. The 42 anchor investors who participated in the anchor book included 24 foreign portfolio investors, 11 domestic mutual funds, 5 life insurance companies and 2 alternative investment funds (AIFs).

4. Government of Singapore Investment Corporate (GIC) and Monetary Authority of Singapore (MAS) together made a large investment of ₹401.5 crore in the anchor book. 

5. Nomura Asset Management, Fidelity, Eastspring Investments, Goldman Sachs Asset Management and Amundi Funds were among the other anchor investors which participated in the bidding. 

6. SBI Mutual Fund, Axis MF, Aditya Birla Sun Life MF, HDFC MF, Mirae Asset MF, Kotak MF, Canara Robeco MF, Sundaram MF, SBI Life Insurance Company and Max Life Insurance Company also invested in the anchor book.

7. This could be among the largest anchor book size after SBI Cards and Payment Services and PowerGrid InvIT. SBI Cards and PowerGrid InvIT mopped up ₹2,769 crore and ₹3,480 crore respectively from anchor investors.

8. The Sona Comstar IPO comprises a fresh issue of shares amounting to ₹300 crore and an offer for sale (OFS) aggregating up to ₹5,250 crore by selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of the Blackstone Group Inc.

9. The Blackstone-promoted company intends to utilise the proceeds from the fresh issue to repay/prepay a little over ₹241 crore of its borrowings besides general corporate purposes.

10. 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 and

11. 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.

(With agency inputs)