Sundaram Finance Holdings sells Sundaram Clayton stake for Rs 127 crore

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SF Holdings has sold part of its stake in the Venu Srinivasan- headed Sundaram Clayton for Rs 127 crore. With SF Holdings selling a 1.5 percent stake, its holding in Sundaram Clayton now stands at 9.74 percent.

The Sundaram Finance group of companies belong to the TS Santhanam family of the TVS Group. According to a top company source, the sale was done in the open market.

The partial sale was done during the last quarter, SF Holdings said in a filing to the stock exchanges on Thursday.

“The realised gain has been accounted for as per Ind AS (Indian Accounting Standard) practice,” the company said.

After the stake sale, the company also announced a special dividend. “Using the proceeds of the divestments, the board of SF Holdings has declared a special dividend of 20 percent,” the company said.2

Fresh investment in Italy venture

During the quarter ended December 2021, SF Holdings has made further investments in its composites business. It made a follow-on investment of 2 million euros in Mind S.r.l., Italy, which focuses on carbon fibre components for the automotive industry in Europe.

Over the previous 18 months, SF Holdings had already invested 2.60 million euros in Mind S.r.l. The company now has a 48.86 percent stake in the Italian firm. It has also promoted a greenfield facility to manufacture carbon fibre components in Tiruvallur district, Tamil Nadu, with an initial investment of Rs 19.50 crore in Sundaram Composite Structures Pvt Ltd.

SF Holdings is the demerged investment arm of Sundaram Finance Ltd, and it is listed on the National Stock Exchange. SF Holdings is an exempted Core Investment Company. The company’s investments are primarily in automotive space companies, many of them co-promoted with the TVS Group.

Its significant investments include those in Sundaram Clayton, Wheels India, IMPAL (all listed) and Brakes India and Turbo Energy (both unlisted) – most of them leaders in their respective markets.

SF Holdings, through its 100 percent subsidiary, Sundaram Business Services Ltd, and its own operations, SF Holdings, is in the business of outsourced business processing and support services.

Net profit up 22%

SF Holdings, in the meanwhile, reported a 22 percent increase in consolidated net profit for the quarter ended December 2021. It registered a consolidated net profit of Rs 33.63 crore for the quarter, an increase of 22 percent over the Rs 27.65 crore in the corresponding quarter of the previous year.

Consolidated profit for the nine months ended December 2021 went up 128 percent to Rs 84.49 crore, compared to the Rs 37.06 crore in the corresponding quarter of the last financial year.

SF Holdings primarily operates as a holding company, owning a portfolio of automotive businesses, including foundries, wheels, brakes, turbochargers, axles, and distribution of spare parts.

Dividends from portfolio companies form a substantial part of the financial results. Dividend received from portfolio companies was at Rs 29.38 crore for the quarter ended December 2021, as against the total dividend of Rs 14.13 crore during the financial year 2020-21.