Blackstone-backed Sona Comstar recordsdata DRHP for Rs 6,000 crore IPO; ultimate ever in auto component segment

Sona Comstar is a important vendor to the global EV market. The IPO proceeds are typically frail for debt repayment and future capex investments

February 24, 2021 / 07: 32 AM IST

American non-public equity wide Blackstone-promoted auto parts company Sona Comstar has filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) to launch an preliminary public offer (IPO) and elevate around Rs 6,000 crore in 2021, sources with recordsdata of the matter instructed Moneycontrol. If plans fructify, this would possibly occasionally perhaps be the last observe IPO by any auto component company in India Inc.'s history.

On January 7, Moneycontrol become once the first to document about the company's list plans and that the filing of papers with the market regulator will seemingly be performed by February.

“The e-filing of the DRHP has been performed. The dimensions of the IPO has elevated as in comparison to earlier plans. The overall size is Rs 6,000 crore with a important factor of Rs 300 crore and the steadiness secondary component of Rs 5,700 crore,” one among the oldsters cited above acknowledged.

“As a ways as the IPO proceeds are eager, basically the most important part will repay contemporary debt and the relaxation will intention debt funding capacity for added future capex investments. Blackstone will proceed to be a protracted toddle investor in the company publish list,” a 2d person instructed Moneycontrol.

“Investment banks Kotak Mahindra Capital, JM Financial, Credit score Suisse, Nomura and JP Morgan are engaged on the IPO. The factual advisors are Cyril Amarchand Mangaldas & Trilegal,” a Third person added.

But any other particular person confirmed the filing by Sona Comstar. All four persons attentive to the trend spoke to Moneycontrol on the condition of anonymity. When contacted, Blackstone declined to advise. Moneycontrol would possibly perhaps no longer in an instant elicit a advise from the funding bankers and legislation companies.

Blackstone is the enviornment’s largest quite plenty of asset supervisor and the last observe proprietor of enterprise accurate property in India. It’s housing finance portfolio firm Aadhar Housing Finance has also filed a DRHP for a $1 billion IPO in 2021. Moneycontrol become once the first to document about it on January 25.

The Sona Comstar myth

In August 2019, Blackstone announced the merger of Chennai-basically basically based totally auto component company Comstar, which it managed, with Sunjay Kapur's Sona BLW to intention Sona Comstar. Blackstone would sustain a 65 p.c stake in the company and Kapur would sustain 35 p.c, in step with the announcement.

Kapur is the Chairman of Sona Comstar, which has 9 flowers spread across India, China, Mexico and the United States. It had a revenue of Rs 1,600 crore in FY19 and has location a revenue aim of $1 billion by 2024. In accordance to news experiences, it is a ways a vendor to auto majors akin to Ford Motors, Daimler, Tata Motors and Ashok Leyland. It has won 50 recent applications from 26 possibilities, which is anticipated to translate into revenues beginning the hot year.

The global EV play

Sona Comstar is a global firm, varied across platforms, products, geographies, possibilities and raze segments. It is a number one R&D and innovation-led car skills player which designs and manufacturing extremely engineered, mission serious car systems and parts.

It is a important vendor to the global EV market which has benefited from the mega trend to electrification and derives 13 p.c plus revenue from gross sales to the pure play Battery EV (BEV) segment. The company has industry main monetary metrics with EBITDA margins of around 25 p.c and ROE of 35 p.c.

In accordance to its web web site, the firm is one among the enviornment’s largest producers of precision-forged gears for differentials with a global market portion of 6 p.c as smartly as the producer of the enviornment’s lightest starter motor. Within the domestic market, the company is a number one player in the commercial automobile scheme for bevel tools offers.

As well to differential gears, the firm produces BSG (Belt Driven Starter Generator) solutions for hybrid cars, traction motors for EV applications, starter motors, alternators, transmission gears, axle stubs and differential assemblies for electrical and combustion engine autos.

In accordance to the Vehicle Factor Manufacturers Association (ACMA), auto component exports from India are anticipated to attain $80 billion by 2026.

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