Shares of Sona BLW Precision Forgings (Sona Comstar) made a muted listing debut on the stock exchanges today. The stock started trading at Rs 302 per share, up 2.92% or Rs 11.4 premium more than the IPO cost of Rs 291 per share. Sona Comstar entered the marketplace earlier this month to raise Rs 5,550 crore by means of a mix of fresh issuance of equity shares and supply for sale by current shareholders. The firm is a diversified manufacturer of automotive elements and systems with capabilities across drivetrain components and motor electronics. On listing the stock had a marketplace capitalization of more than Rs 17,000 crore.
From Sona Comstar’s Rs 5,550 crore, more than 94% was an supply for sale by current shareholder, like Singapore VII Topco, a subsidiary of private equity firm Blackstone. Post situation, promoter shareholding will drop t0 67.3% from one hundred% though public shareholding will raise from zero to 32.7%. Sona BLW’s IPO was subscribed 2.28 instances by investors. Qualified institutional purchasers (QIB) bid for situation 3.46 instances though retail investors subscribed 1.58 instances the portion reserved for them. Non-institutional investors (NII) failed to totally subscribe to the quota reserved for them.
Soan Comstar is a crucial player in the increasing worldwide electric automobile marketplace. “Sona Comstar stands apart from much of the rest of the auto component universe by providing a strong play on the upcoming mega opportunity of electrification. As of FY21, the company obtained ~40% of revenues from ‘electrified’ platforms, including ~14% from pure battery EVs (BEV),” brokerage and investigation firm ICICI Direct stated in a pre-IPO note.
Brokerage firm Motilal Oswal has a positive lengthy term view on the stock. “We like SBPFL given its presence in the fast-growing global EV market, diversified portfolio across categories and robust financials,” they stated earlier in a note. “Though the valuation appears fully priced in, given its thrust in fast-evolving EV space both in India and globally, the market would like to give premium to such emerging growth story,” they added. The production of battery electric cars across the globe is anticipated to develop at 36% CAGR amongst 2020 and 2025, aiding the positive view voiced by analysts.
The firm will join peers such as Motherson Sumi Systems, Bosch, Bharat Forge, Varroc Engineering, and Minda Industries amongst other individuals on the bourses.