April 27: The focus for the Samvardhana Motherson Group (SMG) in overseas markets will, going forward, be the BRIC countries, especially Russia where the Group does not have a manufacturing presence as yet. Chairman Vivek Chaand Sehgal says the Group has a huge future growth strategy that includes setting up a manufacturing facility in Russia. This could be an independent initiative of SMG or achieved through the acquisition or JV route.
At present, the Russian market is being tapped through exports from the Group’s European facility but is expected to change later as the Russian automotive market grows further with an increasing presence of foreign carmakers. Already Volkswagen, Hyundai, Renault and Toyota have their assembly units there and more are expected. Sehgal elaborates that the laws in Russia are the constraint in setting up a presence in the region.
Overall, in the BRIC countries, 40 to 43 million new cars that have not been made will be added till 2020, he says. He adds that the Russian market will total about 8 to 9 million units by 2020 from its current levels.
Meanwhile, Group company SMFL is entering the capital market with its initial public offering that will raise Rs 1,665 crore with a price band of Rs 113 to Rs 118 per equity share. The Samvardhana Motherson IPO will open for subscription on May 2 and close on May 4. The company intends to use issue proceeds of Rs 1,344 crore for pre-payment and repayment of debt facilities availed by the company and its subsidiaries with Rs 338.5 crore; strategic investments will be funded with an outlay of Rs 627.5 crore and funding investments in the rearview vision systems business with Rs 156 crore.
SHOBHA MATHUR