Multinational companies (MNCs) sell stakes in their Indian entities for reasons like debt reduction or capital raising, driven by factors such as intense industry competition. This move also enables MNCs to optimize their capital structure, gain more control over the Indian unit by delisting from the stock exchange, and attract new investors or partners for streamlined operations.
Here are two companies in which the parent company is planning to sell its stake in the Indian arm.
Samvardhana Motherson International Ltd
Samvardhana Motherson International Limited (SAMIL) is one of the largest and fastest-growing automotive OEM suppliers in the world. It is a diversified global manufacturing expert and is one of the top 25 global automotive suppliers.
The company has a 24 percent global market share in the manufacture of exterior mirrors for passenger cars, commercial vehicles, and heavy trucks and is a leading specialist in the automotive industry for camera-based sensing systems.
The Group is India’s biggest manufacturer of wire harnesses for passenger automobiles, with a 40% market share.
According to the Moneycontrol report, Sumitomo Wiring Systems from Japan is likely to exit completely from Samvardhana Motherson. The firm plans to divest its entire 14.1% stake in the company. And company has appointed Nomura as the investment banker for the stake sale.
In March 2023, Sumitomo offloaded a 3.4% stake in the company at a price of ₹70.1 per share.
Samvardhana Motherson International shares have gained 17 percent in the last six months and 37 percent in a year. The company is engaged primarily in the manufacture and sale of components to automotive original equipment manufacturers. India’s.
According to financials, operational revenue climbed by 27 percent from ₹20,267 crore in Q3FY23 to ₹25,698 crores in Q3FY24, while net profit increased by 120 percent from ₹288 crores to ₹ 633 crore over the same time.
Novartis India Ltd
Novartis India Ltd is a leading global medicines company, which is primarily engaged in the Business of Wholesale pharmaceuticals and medical goods. It imports various medicines to India from different sources across the globe.
Novartis, present in India since 1947, is deeply engaged in drug development, manufacturing, commercial, and social business services. It operates through two legal entities: Novartis Healthcare Private Limited (NHPL) and Novartis India Limited (NIL).
Novartis India Ltd stock soared by nearly 11% on February 19, 2024, reaching a 52-week high of ₹1,224 per share. The surge followed after Novartis AG’s announcement of its intention to sell its entire 70.68% stake in Novartis India Limited, a move currently under review by the parent company in Switzerland.
The assessment encompasses various aspects of Novartis India Limited, with the parent company evaluating the potential impact of divesting its entire stake in the Indian pharmaceutical business. As of December 2023, Novartis AG held 70.68% stake in Novartis India.
According to financials, operational revenue climbed by 6.2 percent from ₹80 crores in Q3FY23 to ₹85 crores in Q3FY24, while net profit increased by 237 percent from ₹8 crores to ₹ 27 crore over the same time
Novartis India Ltd shares have gained 53 percent in the last six months and 81 percent in a year.
Written By Omkar Chitnis
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