Sona BLW Precision IPO subscribed 27% on Day 2

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The initial public offer (IPO) of Sona BLW Precision Forgings received bids for 2.91 crore shares as against 10.71 crore shares on offer, according to the stock exchange data at 17:00 IST on Tuesday (15 June 2021). The issue was subscribed 0.27 times.

The issue opened for bidding on Monday, 14 June 2021, and it will close on Wednesday, 16 June 2021. The price band for the IPO is set at Rs 285-291 per share. An investor can bid for a minimum of 51 equity shares and in multiples thereof.

The issue comprises of fresh issue of equity shares aggregating up to Rs 5,550 crore comprising of a fresh issue of up to Rs 300 crore and an offer for sale (OFS) of up to Rs 5,250 crore (including anchor portion of 8,58,24,742 equity shares).

One of the promoters, Singapore VII Topco III, an affiliate of The Blackstone Group Inc is selling part of its stake through an offer for sale aggregating up to Rs Rs 5,250 crore. Post OFS, the shareholding of Singapore VII Topco III will decline to 34.18% on expanded post-issue equity down from 66.28% pre-IPO.

Ahead of the IPO, the company finalized the allocation of 8,58,24,742 equity shares to anchor investors at Rs 291 per share aggregating to Rs 2,497.50 crore.

Proceeds from the fresh issue will be used for repayment and pre-payment of identified borrowings in full availed by the company to the extent of Rs 241.117 crore and balance for general corporate purposes.

The total debt of the company as the end of 31 March 2021 stood at Rs 366.26 crore including a long-term loan of Rs 249.748 crore up from Rs 306.782 crore as of end of March 2020.

On a consolidated basis, the company reported a net profit of Rs 215.17 crore and sales of Rs 1,566.30 crore in the twelve months ended on 31 March 2021.

Sona BLW Precision Forgings (SBPF) is primarily engaged in designing, manufacturing and supplying highly engineered, mission-critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors [Brushless direct current (BLDC) motor and Permanent magnet synchronous motor (PMSM)] and motor control units to automotive original equipment manufacturers (OEMs) across the US, Europe, India and China, for both electrified and non-electrified powertrain segments.

The company is among the top ten players globally in the differential bevel gear market and in the starter motor market on the basis of respective volumes supplied to its end segments in the calendar year 2020 and has been gaining global market share across products.

The company is one of a few companies globally, with the ability to design high power density EV systems handling high torque requirements with a lightweight design, while meeting stringent durability, performance and NVH specifications, enabling EV manufacturers to enhance the vehicle range, acceleration and the overall efficiency.