SF Holdings divests 1.5 percent stake in Sundaram Clayton, gains Rs 124.66 crore

Sundaram Finance Holdings Ltd., (SF Holdings) which reported a net profit to Rs 33.63 cr for the quarter ended December 31, 2021, has continued to consolidate long-term holdings in its portfolio companies.

As part of this exercise, SF Holdings sold a 1.50% stake held in Sundaram Clayton Ltd during the quarter ended December 31, 2021, for a total gain of Rs 124.66 cr, bringing its stake down to 9.74%. 

As per Ind AS practice, the realised gain has been accounted through OCI. Using the proceeds of the divestments, the Board of SF Holdings declared a special dividend of 20%. 

Last year, SF Holdings bought out foreign partners in Wheels India and Brakes India, by infusing Rs 450 cr.

During the quarter ended December 31, 2021, SF Holdings made further investments in its composites business. It made a follow-on investment of Euro 2 million in Mind S.r.l., Italy, which focuses on carbon fibre components for the automotive industry in Europe. 

Prior to this, over the previous 18 months, SF Holdings had already invested Euro 2.60 million in Mind S.r.l. Now, SF Holdings has a 48.86% stake in the Italian firm.

It has also promoted a green-field operation to manufacture carbon fibre components in Thiruvallur district, with an initial investment of Rs 19.50 cr in Sundaram Composite Structures.

SF Holdings primarily operates as a holding company owning a portfolio of automotive businesses including foundries, wheels, brakes, turbo chargers, axles, and distribution of spare parts. As a result, dividend from portfolio companies forms a substantial part of the financial results. Dividend received from portfolio firms stood at Rs 29.38 cr for the period ended December 31, 2021, as against the total dividend of Rs 14.13 cr received during the financial year 2020-21.

The company’s consolidated net profit of Rs 33.63 crore for the quarter ended December 31 2021, surged 22% over the Rs 27.65 cr for the corresponding period of the previous year. Consolidated profit for the nine months ended December 31, 2021 went up 128% to Rs 84.49 cr, compared to Rs 37.06 cr reported in the corresponding period of the last financial year.