Automotive components manufacturer Sona BLW Precision Forgings Ltd successfully raised Rs 2,400 crore through a Qualified Institutional Placement (QIP) of equity shares, as per a stock exchange filing made on September 9. The QIP saw strong participation from major institutional investors, with SBI Mutual Fund emerging as the largest buyer, acquiring 25% of the shares for Rs 600 crore.
Other prominent investors include ICICI Prudential, which invested Rs 200 crore for 8.33% of the shares offered. The QIP was priced at Rs 690 per share, representing a slight discount of 1.3% to the floor price of Rs 699.01 and a 1% discount to the stock’s closing price of Rs 697.05 on September 9.
The issue saw frantic subscription with the subscription level touching 5.5 times of the shares on offer. Other than SBI Mutual Fund and ICICI Prudential, the QIP also saw White Oak, Goldman Sachs Asset Management, Axis Mutual Fund, Aditya Birla Sun Life Mutual Fund, Norges, BNP Paribas, Fidelity International, and Franklin Templeton participate.
Sona BLW proposes to utilize the issue proceeds towards augmenting the capital structure of the company. The proceeds will be used for organic and inorganic growth. Managing Director and Group CEO Vivek Vikram Singh said, “We will use the QIP proceeds to augment the company’s capital to pursue our growth ambitions.”
Worse still, the company has actually been in the limelight over its probable acquisition intent. Recently, it was reported by CNBC-TV18 that Sona BLW is in talks to buy the railways business of Escorts Kubota, which it says has an estimated value of around Rs 2,000 crore.
Although it lost 3% to Rs 697.05 on Monday before the QIP allotment, Sona BLW’s stock is up 8% in 2024. It has been an underperformer compared to the NSE Nifty 50, which has risen 15% in the same period.
The QIP was led by Jefferies India Private Limited and JM Financial Limited as the Book Running Lead Managers. Shardul Amarchand Mangaldas & Co. acted as the Legal Counsel for Sona BLW. AZB & Partners and Linklaters Singapore Pte Ltd acted as Legal Counsels for the Book Running Lead Managers.
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Source: Moneycontrol
News Desk
