Sona Comstar files for ₹6,000-crore IPO

Our Bureau Mumbai | Updated on February 24, 2021

If successful, to be the largest IPO by an auto component firm in the country

Sona BLW Precision Forgings, an automotive technology company backed by global private equity major Blackstone Group, has filed early papers with market regulator to raise ₹6,000 crore through an initial public offering (IPO). The firm operates under the brand name Sona Comstar.

The New Delhi-based company filed the draft red herring prospectus (DRHP) with SEBI on Wednesday.

According to market sources, if successful, this would be the largest IPO by an auto component firm in the country.

The public issue comprises a fresh issue of up to ₹300 crore and an Offer for Sale of up to ₹5,700 crore by shareholder Singapore VII Topco III Pte Ltd, an affiliate of The Blackstone Group Inc. The company will reserve up to 75 per cent on offer for qualified institutional (QIB) buyers, up to 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

The firm intends to use the proceeds from the fresh issue to repay borrowings of ₹225 crore and for general corporate purposes.

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

Sona BLW Precision Forgings is into manufacturing of automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, EV traction motors, and motor control units, among others. The company supplies its products to automotive original equipment manufacturers across the US, Europe, India and China.

During FY16-20, the company’s total operating income grew at a compounded annual growth rate of 10.9 per cent.

Blackstone holds a 65 per cent stake in the firm; the remaining 35 per cent is held by Sona BLW Precision Forgings’ Chairman Sunjay Kapur.

Published on February 24, 2021

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