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Sona BLW Precision Forgings IPO ends with decent subscription

Published on Jun 17, 2021 11:46

The initial public offer (IPO) of Sona BLW Precision Forgings received bids for 24.44 crore shares as against 10.71 crore shares on offer, according to the stock exchange data. The issue was subscribed 2.28 times.

The qualified institutional buyers (QIBs) category was subscribed 3.46 times. The retail individual investors category was subscribed 1.58 times. The non-institutional investors category was subscribed 0.39 times.

The issue opened for bidding on Monday, 14 June 2021, and closed on Wednesday, 16 June 2021. The price band for the IPO was set at Rs 285-291 per share.

The issue comprised of fresh issue of equity shares aggregating up to Rs 5,550 crore comprising of a fresh issue of up to Rs 300 crore and an offer for sale (OFS) of up to Rs 5,250 crore (including anchor portion of 8,58,24,742 equity shares).

One of the promoters, Singapore VII Topco III, an affiliate of The Blackstone Group Inc is selling part of its stake through offer for sale aggregating upto Rs Rs 5,250 crore. Post OFS, the shareholding of Singapore VII Topco III will decline to 34.18% on expanded post issue equity down from 66.28% pre-IPO.

Ahead of the IPO, the company finalized allocation of 8,58,24,742 equity shares to anchor investors at Rs 291 per share aggregating to Rs 2,497.50 crore.

Proceeds from fresh issue will be used for repayment and pre-payment of identified borrowings in full availed by the company to the extent of Rs 241.117 crore and balance for general corporate purposes.

Total debt of the company as end of 31 March 2021 stood at Rs 366.26 crore including long term loan of Rs 249.748 crore up from Rs 306.782 crore as end of March 2020.

On a consolidated basis, the company reported a net profit of Rs 215.17 crore and sales of Rs 1,566.30 crore in the twelve months ended on 31 March 2021.

Sona BLW Precision Forgings (SBPF) is primarily engaged in designing, manufacturing and supplying highly engineered, mission critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors [Brushless direct current (BLDC) motor and Permanent magnet synchronous motor (PMSM)] and motor control units to automotive original equipment manufacturers (OEMs) across US, Europe, India and China, for both electrified and non-electrified powertrain segments.

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.

The company is one of a few companies globally, with the ability to design high power density EV systems handling high torque requirements with a lightweight design, while meeting stringent durability, performance and NVH specifications, enabling EV manufacturers to enhance the vehicle range, acceleration and the overall efficiency.

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