PremiumBlackstone-promoted Sona BLW Precision Forgings Ltd (Sona Comstar) on Wednesday filed its draft red herring prospectus with Securities and Exchange Board of India to raise up to ₹6000 crore through an initial public offering (IPO).
The IPO comprises a fresh issue worth ₹300 crore and an offer for sale of up to ₹5,700 crore by Singapore VII Topco III Pte Ltd, an affiliate of Blackstone. As of December, Singapore VII Topco III Pte held a 66.28% stake in Sona Comstar, while the rest 33.72% was held by Sona Autocomp Holding Pvt. Ltd.
Kotak Mahindra Capital, Credit Suisse, JP Morgan India, JM Financial and Nomura are advising the company on the IPO. In January, mortgage financier Aadhar Housing Finance, which is also backed by Blackstone, had filed its draft papers for a ₹7,300-crore IPO.
The two will be among the biggest IPOs to hit the Indian markets this year.
Sona Comstar will use the proceeds from the fresh issue to repay its ₹225 crore debt, besides general corporate purposes. “We believe that such repayment or pre-payment will help reduce our outstanding indebtedness, debt servicing costs and enable utilization of our accruals for investment in business growth and expansion. Additionally, we believe that the leverage capacity of our company will improve our ability to raise resources in the future to fund our potential business development opportunities and plans to grow and expand business", the company said in its draft prospectus.
Sona Comstar designs, manufactures and supplies highly- engineered, mission-critical automotive systems and components to auto original equipment manufacturers (OEMs) across the US, Europe, India and China, for both electrified and non-electrified powertrain segments.
The company has nine manufacturing and assembly units across India, China, Mexico and the US, of which six are in India. In FY20, it posted revenue of ₹1,037.98 crore, up from ₹699.22 crore a year-ago, and net profit of ₹360.34 crore, rising from ₹100.11 crore a year earlier.
