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Sona Comstar surges after tepid listing on bourses

Sona Comstar's Rs5,550-crore initial public offer (IPO), open during 14-16 June, was subscribed 2.28 times at a price band of  ₹285-291 per share. (Photo: iStock)Premium
Sona Comstar's Rs5,550-crore initial public offer (IPO), open during 14-16 June, was subscribed 2.28 times at a price band of 285-291 per share. (Photo: iStock)

  • 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 a net profit of 360.34 crore

MUMBAI: Shares of Sona BLW Precision Ltd, also known as Sona Comstar and backed by private equity firm Blackstone Group, made a tepid debut on bourses on Thursday, listing at a 3.8% premium to the issue price of 291 per share. However, soon after the stock surged nearly 25% backed by robust volumes.

On the BSE, at 1049 am, the stock traded at Rs357 apiece, having opened at Rs302. Shares have touched a high of Rs362.85 and a low of Rs295.15 so far today.

Sona Comstar's Rs5,550-crore initial public offer (IPO), open during 14-16 June, was subscribed 2.28 times at a price band of 285-291 per share. The company plans to use the proceeds from the issue to repay debt of Rs225 crore and general corporate purposes.

The IPO comprised a fresh issue of Rs300 crore and an offer for sale of 5,250 by Singapore VII Topco III Pte Ltd, an affiliate of Blackstone.

Considering the FY21 adjusted EPS of 3.69 on a post issue basis, the company listed at PE of 78.9 times. Its listed peers namely Motherson Sumi and Minda Industries are trade at a PE of 73.7 times and 196.0 times, respectively, analysts said.

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.

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