Sona group to raise Rs 160 cr from JM fund

The Delhi-based auto component major Sona group will be raising Rs 160 crore through private placement of its equities with JM Financial India fund (JM Morgan Stanley's Indian arm) in its holding company Sona Investments.

Surinder Kapur, CMD, Sona Group said: "These funds raised would be utilised for the group's organic and inorganic growth. The investment will be made by JM Financial India fund and we have not finalised the percentage of the stake to be divested."

Kapur will be increasing his personal stake in Sona Koyo (steering wheels) to 25 per cent from the current 17 per cent, while in Sona Okegawa (forging unit) it will be increased to 75 per cent from the current 61 per cent.

"Sona Investments is holding company of my personal investment in Sona Okegawa and Sona Koyo. And through this I am increasing my stake in both the two companies," Kapur said.

Sona Group has been looking out for acquisitions in North America and Europe, It is planning to expand forged gear manufacturing business and the funds will be utilised to acquire overseas companies. "We were looking out for a greenfield facility in North America. We have already identified, few prospective companies and feasibility studies are on to identify the best possible option," Kapur added.

Within the fiscal year 2007-08 the company plans to increase its forged gears capacity to 20 million from the current 9 million. Sona group is currently undertaking a Rs 600 crore investment expansion, of which Rs 400 crore have been planned for expansion in Sona Koyo while the rest for Sona Okegawa, in the next two and a half years.