Blackstone to sell entire stake in Sona BLW Precision Forgings in block deal, stock falls

Blackstone

Shares of Sona BLW Precision Forgings Ltd witnessed a series of block deals on Monday in which around 19 percent stake in the company changed hands in 35 bunches, CNBC TV-18 reported. Details of buyers and sellers were not available.

Shares of Sona BLW Precision had opened sharply lower after a CNBC TV-18 report said the promoters Blackstone, one of the world's largest private equity firms, will sell its entire 20.5 percent stake in the auto component maker. At 9.40am, Sona BLW shares were trading 4.5 percent lower at Rs 416.35, while the benchmark BSE Sensex was up 0.59 percent at 59,482 points.

Sona BLW hit an intraday low of Rs 408.10 and fell as much as 5.84 percent, its sharpest decline since February 24, 2022. The stock was trading lower for the fourth straight session. Year to date it is down 1.8 percent.

The deal will be managed by investment bank JM Financial at a floor price of Rs 400 per share, as per the CNBC TV-18 sources.

The sale would fetch at least $583 million. However, according to news reports, the company expects high demand and may raise as much as $640 million.

In 2017, Blackstone acquired Comstar Automotive Technologies, followed by the acquisition of Sona BLW Precision Forgings Ltd in 2018, which was later merged with Comstar to form Sona Comstar, said the report. In total, Blackstone invested around $385 million in both businesses.

Blackstone has made Rs 12,800 crore or $1.6 billion in capital gains through two previous part-exits in 2018 to 2012. It sold Rs 5,250 crore at the time of Sona BLW public issue in June 2021 and another chunk for Rs 4,044 crore in August 2022.

According to its website, Sona Comstar supplies a variety of parts, including differential assemblies, gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors, and motor control units to original equipment manufacturers located in the US, Europe, India, and China.