Samvardhana Motherson Finance IPO to raise Rs 1,665 cr

PTI Mumbai | Updated on April 24, 2012

Samvardhana Motherson Finance (SMFL), a components supplier to the automotive industry, will raise Rs 1,665 crore through an initial public offer (IPO).

The IPO will open for subscription on May 2 and close on May 4, 2012.

The public issue includes a fresh issue of Rs 1,344 crore and an Offer For Sale (OFS) of Rs 321 crore by Radha Rani Holdings Pte Limited.

The company intends to use issue proceeds of Rs 1,344 crore for funding pre payment and repayment of debt facilities availed by company and its subsidiaries with Rs 338.5 crore, funding strategic investments with an outlay of Rs 627.5 crore and funding investments in rear view vision systems business with Rs 156 crore.

The proceeds from the OFS portion (Rs 321 crore) will be paid to the selling shareholder and the company will not receive any proceeds.

“Our business has ongoing capital requirement and we are currently adding new production facilities and expanding and upgrading existing production facilities in India and abroad,” SMFL Chairman, Mr Vivek Chaand Sehgal, told reporters here.

The company currently markets and distributes its products and services and have presence in 25 countries, with the construction of manufacturing facilities underway in India, Brazil, Mexico, Spain and Thailand, Mr Sehgal said.

SMFL is an integrated design and manufacturing company providing full system solutions to diverse industries.

The company presently supplies components to automotive original equipment manufacturers namely Volkswagen group, BMW, Daimler, Renault, Nissan, Ford India, Volvo Car Corporation, Maruti Suzuki, Tata Motors, Honda Siel Cars India, Toyota, Kirloskar Motor and Fiat India Automobiles.

In the nine months period ended December 31, 2011, its 76.6 per cent consolidated income was from customers located outside India.

The price band of the IPO will be decided by the company and the selling shareholder in consultation with the book running lead managers (BRLMs). The minimum bid lot size will also be decided by the company in consultation with the BRLMs.

The company may consider participation by anchor investors, where the anchor investors will bid during the anchor investors bidding period, i.e. one working day prior to the bid opening date.

The book running lead managers to the issue are Standard Chartered Securities (India) Limited and J P Morgan India Private Limited.

Published on April 24, 2012

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