Japanese promoter Sumitomo will sell entire stake in Samvardhan Motherson, deal worth ₹ 10 thousand crore: Report
Before the market opens, a big news has come out regarding Samvardhan Motherson. Japan’s Sumitomo Wiring Systems is now preparing to sell the remaining 14.15% stake in this company soon. Moneycontrol has given this information in one of its reports quoting sources. The current market capitalization of Samvardhan Motherson is ₹71,150 crore. Accordingly, this deal for sale of 14.15% share can be finalized for ₹ 10,000 crore.
Japan’s Sumitomo Wiring Systems has also appointed global financial company Nomura as investment banker for this deal. Quoting sources, it has been said in this report that Nomura has been appointed as investment banker for this stake sale and some mutual fund houses have also been contacted. After the exit of Sumitomo Wiring Systems from this stock, it is believed that the important overhang regarding the stock will end.
At what price is a deal possible?
Another person with knowledge of the matter has been quoted as saying that the deal could be in the price range of ₹110-₹120 per share. Samvardhan Motherson’s shares closed at ₹ 105.25 per share on Tuesday. However, it has also been said in this report that these talks are currently only in the initial stages. However, no official information has come from the company regarding this yet.
Last year also Sumitomo had sold its share
This block deal is expected to be completed in the current quarter itself. Last year i.e. in March 2023, Sumitomo had sold a partial stake in Samvardhan Motherson. During this period, Sumitomo had sold 3.4% stake at a price of ₹ 70.1 per share. Sumitomo had sold this stake as part of its global deleveraging strategy to repay its debt in an era of rising interest rates. In this transaction, Societe Generale and Copthall Mauritius Investments had bought shares.
Analyst’s view on Samvardhan Motherson
Due to slow growth in America and Europe, the performance of this company has not seen much improvement in the second quarter of the current financial year. However, brokerage firms are broadly bullish on auto component makers. He has given a ‘buy’ opinion on Samvardhan Motherson. Domestic brokerage Motilal Oswal believes that reduction in expenditure burden and expansion of capacity in developed markets will lead to improvement in efficiency going forward.
Emkay Research says that due to cyclical recovery and premiumization and electrification in global automotive production, the business is likely to see a strong growth of 15% CAGR for 2023-2026.
