Blackstone-backed auto parts marker Sona BLW Precision Forgings (Sona Comstar) is betting on continued upsurge in demand for electric and hybrid vehicles as it prepares to throw open its initial public offering (IPO) next week.
At Rs 5,550 crore the Sona Comstar IPO is the largest from the Indian auto component sector. The issue is set to open on April 14 in the price band of Rs 285-Rs 291 per equity share.
Senior officials of Sona Comstar said only one fourth of the company’s revenue came from internal combustion engine (ICE) vehicle supplies in FY21. “From 35 percent in FY19 our dependence on ICE segment has come down to 25 percent,” said Rohit Nanda, Group CFO, Soma Comstar.
Sona Comstar, which is one of the biggest providers of differential assembly to battery electric vehicle (BEV) manufacturers, reported a BEV segment revenue growth of 780 percent to Rs 205 crore during FY21.
Sona Comstar has a market share of 8.7 percent of the global differential assembly market with one in every 12 BEVs using differential assembly made by the company.
Further, the company added that 15 development programs are underway for supply of systems and components to 10 electric vehicle makers across the globe. These include BLDC Motor, PMSM Motor and Controller, E-Axle, differential gears and differential assembly which would be supplied to manufacturers in North America, China, India and Europe.
As per reports from Ricardo and CRISIL the global automotive sales of electric and hybrid vehicles are set to grow to 30.3 million by 2025 from 5.8 million seen in 2020. The outlook for India’s electric two-wheeler is sales of 2.13 million units by FY26 compared to 141000 in FY21.
The company also added that research and development spend in the coming years will continue to be industry-leading. In FY21 Sona Comstar incurred a R&D spend of Rs 91.5 crore which was 5.8 percent of its revenue for the same year. In FY19 and FY20 these percentages stood at 1.7 percent and 3.3 percent, respectively.
Sona Comstar has six manufacturing plants in India and one final assembly plant each in North America, China and Mexico. The company also has three R&D centres in India. The company clocked a turnover of Rs 1,488 crore during FY21, recording a growth of 26 percent compared to FY20 on a consolidated basis while its net profit for FY21 fell by 2.93 percent to Rs 215 core.