Automotive component manufacturer Sona BLW Precision Forgings Ltd has successfully raised Rs 2,400 crore through a Qualified Institutional Placement (QIP) of equity shares, the company said in a late-evening stock exchange filing on Monday, 9 September.
Among the major investors, SBI Mutual Fund acquired a quarter of Sona BLW’s equity issue for Rs 600 crore, while an ICICI Prudential fund secured 8.33 percent of the shares on offer for Rs 200 crore.
Sona BLW approved the issuance of 3.47 crore equity shares to eligible institutional buyers at Rs 690 per share. The stock’s issue price represented a 1.3 percent discount to the floor price of Rs 699.01 and a 1 percent discount to Monday’s closing price of Rs 697.05.
According to the stock exchange filing, the issue attracted strong investor interest, resulting in a subscription level 5.5 times the shares on offer. Among the institutions allocated more than 5 percent of the shares were SBI Focused Equity Fund (25 percent) and ICICI Prudential Flexicap Fund (8.33 percent).
Other participants in the Sona BLW QIP included White Oak, Goldman Sachs Asset Management, Axis Mutual Fund, Aditya Birla Sun Life Mutual Fund, Norges, BNP Paribas, Fidelity International, and Franklin Templeton.
Sona BLW plans to use the proceeds from the QIP to strengthen its capital structure and support its organic and inorganic growth strategies. “We will use the QIP proceeds to augment the company’s capital to pursue our growth ambitions,” said Vivek Vikram Singh, Managing Director and Group CEO of Sona BLW.
Jefferies India Private Limited and JM Financial Limited were the Book Running Lead Managers for the QIP, while Shardul Amarchand Mangaldas & Co. was the Legal Counsel for Sona BLW. AZB & Partners and Linklaters Singapore Pte Ltd were the Legal Counsels for the Book Running Lead Managers.
CNBC-TV18 reported on September 4 that Sona BLW is in talks to acquire Escorts Kubota's railways business, which could be valued at around Rs 2,000 crore, citing unidentified sources.
Sona BLW's share price fell 3 percent on Monday to end at Rs 697.05, ahead of the QIP allotment. The stock has risen about 8 percent so far this year since January, underperforming the NSE Nifty 50, which has gained about 15 percent.
With the allotment of the equity shares in the QIP, Sona BLW's paid-up equity share capital has increased from Rs 586.5 crore to Rs 621.25 crore. The company's market capitalisation is over Rs 41,000 crore as of the last close.
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