By Dominick Rodrigues
Gurugram : Global Automotive Supplier Sona Comstar is launching its IPO at between Rs 285 to Rs 291 per equity share — totally aggregating Rs 5,550 crores — from June 14 to June 16, 2021.
Sunjay Kapur, Chairman and Non-Executive Director, stated that the company intends to utilize the proceeds from the fresh issue to repay/prepay approximately Rs. 241.12 crores of its identified borrowings, besides general corporate purposes.
Vivek Vikram Singh, MD and Group CEO, said that 75% of the company’s revenue came from foreign markets and in CY2025, BEVs and mild hybrids are expected to account for 37% global production. Describing this as an unprecedented opportunity for the company’s growth, he said “We are research-oriented and evolving green technology for future mobility in embedded software, design engineering, proprietary gear design software through three R&D centres in India.”
“While 70 to 90 million vehicles growth is expected in the passenger vehicles industry, our CAPEX will reflect 18 to 36 months later in line with demand of industry. We are depending on electrification by government of our industry to help us achieve the expected 36% growth in the EV industry,” he added.
Describing the company as a leading supplier to the fast-growing global Electric Vehicle (EV) markets with 13.8% revenue from the Battery EV market and 26.7% from the Micro Hybrid / Hybrid market in FY21, he said its global market share of BEV differential assemblies in calendar year 2020 was 8.7%.
The company is among the top ten players globally in the differential bevel gear market and in the starter motor market on the basis of respective volumes supplied to its end segments in calendar year 2020 and has been gaining global market share across products.
While it serves 6 of the top 10 global PV OEMs, 3 out of top 10 global CV OEMs and 7 out of top 8 global tractor OEMs by volumes, the company has strong R&D, engineering and technological capabilities in precision forging, mechanical and electrical systems, as well as base and application software development. It is diversified across geographies, products, vehicle segments and customers.
A CRISIL Report stated that the company has the highest operating EBITDA margin, PAT margin, ROCE and ROE in FY20, as compared to top 10 listed auto component manufacturers in India by market capitalization, and has consistently delivered more than 26% EBITDA margin and more than 35% average ROE each year over FY19-21. Its operating income growth over FY16-20 has exceeded the average of the same peer set.
Kotak Mahindra Capital Company Limited, Credit Suisse Securities (India) Private Limited, JM Financial Limited, J.P. Morgan India Private Limited and Nomura Financial Advisory and Securities (India) Private Limited are the BRLMs to the Offer.
