Sona Comstar raises Rs 2,498 cr from anchor investors ahead of IPO

The company has allocated a total of 8.6 crore equity shares to 42 anchor investors at Rs 291 apiece, which is the upper end of the price band, according to a BSE circular uploaded late night on Friday.

At this price, the company has raised Rs 2,498 crore, which is 45 per cent of the total IPO size of Rs 5,550 crore.

The 42 anchor investors participated in the anchor book included 24 foreign portfolio investors, 11 domestic mutual funds, 5 life insurance companies and 2 alternative investment funds (AIFs).

Government of Singapore Investment Corporate (GIC) and Monetary Authority of Singapore (MAS) together made a large investment of Rs 401.5 crore in the anchor book. Among other anchor investors that participated in the bidding are -- Nomura Asset Management, Fidelity, Eastspring Investments, Goldman Sachs Asset Management and Amundi Funds.

In addition, SBI Mutual Fund (MF), Axis MF, Aditya Birla Sun Life MF, HDFC MF, Mirae Asset MF, Kotak MF, Canara Robeco MF, Sundaram MF, SBI Life Insurance Company and Max Life Insurance Company invested in the anchor book.

This could be among the largest anchor book size after SBI Cards and Payment Services and PowerGrid InvIT.

SBI Cards and PowerGrid InvIT had mopped up Rs 2,769 crore and Rs 3,480 crore respectively from anchor investors.

The IPO comprises fresh issue of shares amounting to Rs 300 crore and an offer for sale (OFS) aggregating up to Rs 5,250 crore by selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of the Blackstone Group Inc.

The price band has been fixed at Rs 285-291 a share for the initial share sale, which will open for public subscription on June 14 and conclude on June 16.

The Blackstone-promoted company intends to utilise the proceeds from the fresh issue to repay/prepay a little over Rs 241 crore of its borrowings besides general corporate purposes.

A total of 75 per cent of the issue has been reserved for qualified institutional buyers, 15 per cent for non-institutional bidders and 10 per cent for retail investors and The company is into designing, manufacturing and supplying highly engineered critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors and motor control units.

It supplies components to automotive OEMs across the US, Europe, India and China, for both electrified and non-electrified powertrain segments and is not dependent on a single product, vehicle segment, customer or geography.

The company is also one of the two largest exporters of starter motors from the country besides being the largest manufacturer of differential gears for passenger vehicles, commercial vehicles and tractors in India.

Some of its key OEM customers include a global OEM of EVs, a North American passenger vehicle and commercial vehicles maker, Ashok Leyland, Daimler, Escorts, Mahindra & Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Volvo and Volvo Eicher.

Sona Comstar, which filed preliminary IPO papers in February, obtained Sebi's go ahead in early May to float the public issue.

Kotak Mahindra Capital Company, Credit Suisse Securities, JP Morgan India, JM Financial and Nomura Financial Advisory and Securities are the book running lead managers (BRLM) of the issue.