Sona Comstar to plug into investor fancy for EV segment at a stiff price
Live MintAfter a brief lull, India’s initial public offering market is set for high action in mid-June. Among the first to ride the wave is auto component manufacturer Sona BLW Precision Forgings Ltd. What’s more, thanks to an exposure to the electric vehicle segment, which is currently highly popular among investors, the company is priced at over 10.5 times revenues. High road Some analysts say another sign that valuations are rich is the fact that majority shareholder, Blackstone Group, is selling nearly half of its shares in the IPO to raise ₹5,250 crore. “Sona’s FY21 revenues at ₹1,600 crore makes it much smaller than Bharat Forge, Endurance Technologies and Motherson Sumi at ₹6,300 crore, ₹6,500 crore and ₹57,400 crore, respectively. However, its Ebitda margin averaged 28% over FY18-21—much higher than the 16-17% for Endurance Technologies and Bharat Forge, and 8% for Motherson Sumi,” said analysts at Jefferies India in a client note.
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