Auto parts maker Motherson to launch Rs 59.45 billion share sale: Report

Samvardhana Motherson International (SAMD.NS), one of India’s largest auto parts manufacturers, is set to launch a share sale of up to ₹59.45 billion this month, according to sources briefed on the matter, according to Reuters.

This move is part of a broader trend of companies tapping into a strong stock market, the news wire reported. 

The fundraising initiative is poised to be one of the largest in India this year, trailing only behind recent ₹83 billion share sales by Vedanta and Adani Energy, as noted by Dealogic data. With a market capitalization of approximately ₹1,245 billion, Motherson supplies parts to both domestic and international automakers, including Maruti Suzuki (MRTI.NS) and Mercedes-Benz (MBGn.DE), Reuters reported. 

Sources told Reuters that the company’s roadshows for the share sale have been well-received by investors. The fundraising effort is expected to conclude by the end of the month, with the proceeds intended for debt repayment, expansion projects, and other capital expenditures.

Motherson has not responded to requests for comment on the matter, according to Reuters. 

The funds will be raised through a Qualified Institutional Placement (QIP), a common method for Indian companies to attract investments from large institutions. Motherson reported revenues of ₹973.25 billion and an operating profit exceeding ₹8,300 crore for the fiscal year ending in March. As of June, the company’s net debt was ₹13,114 crore, the news wire reported. 

Axis Bank (AXBK.NS), HSBC (HSBA.L), Jefferies (JEF.N), JM Financial (JMSH.NS), and Morgan Stanley (MS.N) are advising Motherson on the share sale. Jefferies declined to comment, while the other firms did not respond to Reuters’ inquiries.

Motherson, listed on stock exchanges since 1993, is recognized as one of the world’s largest auto parts suppliers. Its client list includes Tata Motors (TAMO.NS), Volkswagen (VOWG_p.DE), Ford Motor (F.N), and Porsche (PSHG_p.DE). The company also serves the aerospace, consumer goods, and health and medical sectors and has acquired 45 companies globally over the past two decades, according to Reuters. 

India’s stock market is experiencing significant growth, with the benchmark index (.NSEI) up 16% this year, outperforming its Asian counterparts, the news wire reported.