Upcoming IPO: Sona BLW Precision Forgings Limited

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Upcoming IPO: Sona BLW Precision Forgings Limited

Everything you need to know about Sona BLW Precision Forgings Limited’s upcoming IPO in 2021.

Sona BLW Precision Forgings Limited is one of the leading automotive technology companies in India. Established in 1995, the company is primarily engaged in designing, manufacturing, and supplying high-quality mission-critical automotive components such as differential assemblies, gears, conventional and micro-hybrid starter motors, etc.

About Sona BLW Precision Forgings Limited

The company was incorporated as Sona Okegawa Precision Forgings Ltd., a JV with Mitsubishi Metal Corporation Limited. After acquiring Thyssen Krupp’s forging business (which acquired BLW, the inventor of warm forging) and a 25% stake in Mitsubishi, the Sona Group renamed the company to Sona BLW Precision Forgings, which became the largest manufacturer of forged gears. In 2019, Sona BLW acquired Comstar Automotive, a leading designer and manufacturer of starting and charging systems for automobiles, and created a new identity.

They have nine manufacturing and assembly facilities across India, China, Mexico and the USA, of which six manufacturing facilities are located in India. The Company offers differential assemblies, gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors, and motor control units. SONA BLW Precision Forgings serves the automotive sector worldwide. As per CRISIL Report, it is among the top 10 auto-component manufacturers. In 2020, Sona Comstar was among the top 10 global players for the differential bevel gear segment and one of the largest exporters of starter motors in India. As of FY21, consolidated sales were at Rs 1,566 crore, with EBITDA at Rs 441 crore (margins of ~28%) and PAT at Rs 215 crore.

Sona BLW Precision Forgings Limited IPO Issue Details

OPENS ON:June 14, 2021
CLOSES ON:June 16, 2021
Price band:Rs. 285 – Rs.291 per share
Lot size:51 shares
One lot costing:Rs. 14,841
Face Value:Rs. 10 per share
Listing on:NSE, BSE
Issue size:Rs. 5550 cr (Fresh issue: Rs. 300 cr + Offer For Sale: Rs. 5250 cr)
Shareholding:Promoter holding will stand at 67.30% post-issue from 100% pre-issue.

Will list on the exchange on June 24, 2021.

Objects of the issue:

  • Repayment and pre-payment of identified borrowings in full availed by the company.
  • General corporate purposes. The company expects that listing the equity shares will enhance its visibility and brand image among its existing and potential customers.

Interesting facts about Sona BLW Precision Forgings Limited IPO:

  • One of the leading manufacturers and suppliers to the global EV market.
  • Large product portfolio.
  • It is diversified across automotive geographies, vehicle segments, and customers.
  • Strong Research & Development (R&D) capabilities and consistent financial performance track record.
  • The company is gaining global market share across products to reach a share of approximately 5.0% for differential bevel gears, 3.0% for starter motors and 8.7% for Battery Electric Vehicle (BEV) differential assemblies in the calendar year 2020.
  • Considering the FY-21 adjusted EPS of 3.69 on a post-issue basis, the company will list at PE of 78.9Xwith a market cap of Rs. 1,69,737 mn while its listed peers namely Motherson Sumi and Minda Industries are trading at a PE of 73.7X and 196.0X.

To get the complete IPO subscription details of Sona BLW Precision Forgings Limited in the MSFL Research Report and to apply for Sona BLW Precision Forgings Limited IPO, visit Marwadi Shares & Finance Ltd website.

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