Auto parts supplier Sona Comstar to launch Rs 5,550-crore IPO next week

Price band at Rs 285-291 a share; fresh sale of Rs 300 cr and OFS worth Rs 5,250 crore, of shares held by Singapore Topco, Blackstone affiliate

Automotive Supplier Sona Comstar will launch its Rs 5,550-crore initial public offer (IPO) next week. The company has priced the offer at Rs 285–291  per share. The IPO will remain open between June 14 to June 16, and anchor investors will be allotted shares on Friday. The issue consists of a fresh sale of Rs 300 crore and an offer for sale (OFS) worth Rs 5,250 crore, of shares held by Singapore Topco, an affiliate of the Blackstone group. Singapore Topco's current holding stands at 66.2 per cent of the pre-offer paid-up equity capital of the company.

Sona Comstar was planning to raise Rs 6,000 crore earlier, but Singapore Topco decided to reduce the OFS portion. Post-offer, the firm will hold a little over 33 per cent in the company.

The company intends to use the proceeds from the fresh issue to repay Rs 241 crore of borrowings.

Sona Comstar designs, manufactures, and supplies automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors. And motor control units to automotive OEMs across the US, Europe, India and China.

The company has nine manufacturing and assembly facilities across India, China, Mexico and the US, of which six are located in India.

Kotak Mahindra Capital, Credit Suisse Securities India, JM Financial, JP Morgan India and Nomura Financial Advisory and Securities (India)  are the issue managers.

The IPOs of SMEL and Sona Comstar will end the IPO drought of the past two months. The last IPO to hit the market was that of Marcotech Developers in April. The volatility in the market after the second wave of Covid-19 had made companies defer their listing plans. However, the rebound since May has helped some of the companies to revive their plans.