Shares of Motherson Sumi Wiring India, the demerged entity of Motherson Sumi Systems got listed on the stock markets on Monday. The counter hit an upper circuit of 5% at ₹69.30 apiece. However, the shares got locked at a lower circuit of 5 per cent at ₹62.70. The share got listed at ₹66 on the BSE.
On January 17, 2022, Motherson Sumi Systems demerged its wiring harness undertaking. The demerger was aimed at simplifying the group’s structure. Motherson Sumi Wiring India is a joint venture with Sumitomo Wiring Systems Limited, which is a global leader in the manufacture of wiring harnesses, harness components and other electrical wires.
MSWIL enjoys market leadership in the Indian wiring harness industry and gets a lion’s share of its revenue from India. It has an estimated market share of 40% in the country.
The company will be in trade for ten days and intraday trading won’t be allowed. So, if one buys the shares on March 28, then he/she will have to compulsorily take delivery of those trades.
What do analysts say?
“With pure exposure play in domestic passenger vehicles (PV) industry, which is witnessing healthy demand prospects and content/vehicle slated to increase in electrification, we expect the entity to command premium valuations,” said ICICI Securities. These valuations are pegged at ₹70 per share.
The wiring harness business in India benefits from megatrends of premiumization, increasing use of electronics, and electrification. This, coupled with a strong JV partner and market leadership, has resulted in a strong operating performance by MSWIL, as reflected in the sustained higher growth than underlying industry volumes, industry-leading capital efficiencies, and strong balance sheet,” said Motilal Oswal Financial Services.
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