All you need to know on Sona BLW IPO Review 2021: The IPO season is back after over a month-long and this time possibly even covering for the one-month break this time. The Sona BLW Precision Forgings Ltd. IPO opens on 14th June and closes on 17th June 2021.
In this article, we cover the Sona BLW Precision Forgings Ltd. IPO review and look into important IPO information to find out the possible prospects of the company.
Table of Contents
Sona BLW – About the Company
Founded in 1995 as Sona Okegawa Precision Forgings Ltd in New Delhi, the company name was changed to Sona BLW Precision Forgings Ltd. in 2013. The company is one of India’s leading automotive technology companies.
The company is involved in designing, manufacturing, and supplying highly engineered, mission-critical automotive systems and components. These include differential assemblies, Electric Vehicle traction motors (BLDC and PMSM), gears, conventional, micro-hybrid starter motors, and motor control units to automotive OEMs across the US, Europe, India and China, for both electrified and non-electrified powertrain segments.
They also acquired Comstar Entities in 2019. Sona Comstar was named among the top 10 auto-component manufacturers according to a CRISIL report. Sona BLW Precision Forgings is among the top 10 players globally in the differential bevel gear market. As of 2020, the company held a 5% Global market share for differential bevel gears, 3% for starter motors and 8.7% for Battery electric vehicle (“BEV”) differential assemblies. The company is also the leading supplier of BLDC motors in India which are used in two-wheeler and three-wheeler Electric Vehicles.
Sona BLW also ranks in the top 2 exporters for starter motors in India and is also the largest manufacturer of differential gears for passenger vehicles, commercial vehicles and tractors in the country.
The company has 9 manufacturing and assembly facilities 6 of which are in India and the rest in USA, China, and Mexico. They also have 8 warehouses. 5 of these are located in India and the other 3 in US, Germany, and Belgium.
Customers of Sona BLW
Their customers of Sona BLW include Indian and also global MNCs like
- Ampere Vehicle
- Ashok Leyland
- CNH
- Daimler
- Escorts and Escorts Kubota
- Geely
- Jaguar Land Rover
- Carraro
- Dana
- Jing-Jin Electric
- Linamar
- Maschio.
- John Deere
- Mahindra and Mahindra
- Mahindra Electric
- Maruti Suzuki
- Renault Nissan
- Revolt Intellicorp
- TAFE
- Volvo Cars and Volvo Eicher.
Financials of Sona BLW
The company has managed to grow its net profit and revenue at 46.6% and 49.7% CAGR respectively between FY 2019-21. Despite COVID the company has still managed to grow at a 28% EBITDA margin in FY21.
Sona BLW IPO Review 2021 – Key Information
The company is backed by American private equity giant Blackstone through its entity Singapore VII Topco III Pte Ltd which holds a 66.28% stake in the company. The remaining is held by promoters Sunjay Kapur and Sona Autocomp Holdings Private Limited. The Offer for Sale component of the issue worth Rs 5250 crores is by Singapore VII Topco III Pte Ltd. The IPO will result in a 33% stake dilution.
| Particular | Details |
|---|---|
| IPO Size | ₹5,550.00 Cr |
| Fresh Issue | ₹300.00 Cr |
| Offer For Sale(OFS) | ₹5,250.00 Cr |
| Opening Date | Jun 14, 2021 |
| Closing Date | Jun 16, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹285 to ₹291 per equity share |
| Lot Size | 51 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date: | Jun 24, 2021 |
The company has appointed Kotak Mahindra Capital, Credit Suisse Securities, JM Financial, JP Morgan and Nomura Financial as the book running lead managers to issue. KFin Technologies Pvt Ltd. has been appointed as the registrar to the issue.
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Purpose of the IPO for Sona BLW
Apart from the Offer for sale the Rs. 300 crore raised from the fresh issue will be used for the following purpose
- Repayment or prepayment of company’s borrowings fully or partially. The company intends to use Rs. 241 crores for this purpose.
- The remaining will be used for general corporate purposes.
In Closing
In this article, we covered Sona BLW IPO Review 2021. The IPO opens on 14th June and closes on 16th June 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Sona BLW Precision Forgings Ltd.
That’s all for this post. Do let us know what you think of the Sona BLW Precision Forgings Ltd. IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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