The renowned automobile component supplier, Samvardhana Motherson Finance (SMFL) is raising Rs. 1,665 crore through public issue. This includes an offer of sale of Rs. 321 crore by Radha Rani Holdings Pte limited and a fresh issue of Rs. 1,344 crore.
For subscriptions, initial public offering of Samvardhana Motherson will open on 2nd May and close on May 4, 2012. An integrated design and manufacturing company, Samvardhana is engaged in providing complete system solution to various industries.
The company caters to the component requirements of automotive original equipment manufacturers such as Renault, Nissan, Ford India, Volkswagen group, BMW, Daimler, Volvo Car Corporation, and Maruti Suzuki. Some other automobile companies which come in the client list of Samvardhana Motherson are Toyota, Kirloskar Motor, Tata Motors, Honda Siel Cars India, and Fiat India Automobiles.
For repayment of debt facilities and funding pre-payment, the company plans usage of issue proceeds of Rs. 1,344 crore. Out of this, Rs. 338.5 crore will provided to its subsidiaries and Rs. 627.5 crore would be used to fund strategic investments. The company will spend Rs. 156 crore to fund investments in rear-view vision systems business
Selling share holder will receive the entire proceeds from the offer for sale. No proceeds from offer for sales amounting Rs. 321 crore will be provided to the company. SMFL Chairman Vivek Chaand Sehgal, said to the reporters, "Our business has ongoing capital requirement and we are currently adding new production facilities and expanding and upgrading existing production facilities in India and abroad.”
Sehgal informed that the company has its presence in 25 countries, where it distributes and markets products and services. In Mexico, Spain, India, Brazil, and Thailand, Sehgal, the company is developing its manufacturing facilities.
76.6 per cent consolidated income has been registered by the company from customers abroad at the end of nine months in December 31, 2011. The company along with the selling shareholder will decide the price band of the IPO after consulting with the book running lead managers.
Samvardhana Motherson Finance will consult with Book Running Lead Managers to decide minimum bid lot size. Participation by anchor investors will also be considered by the company. During the anchor investors bidding period, a day previous to the bid opening date, the anchor investor will bid. J P Morgan India Private Limited and Standard Chartered Securities (India) Limited are the Book Running Lead Managers.
