Sona BLW successful raises ₹2,400 crore through QIP, proceeds to be used to augment capital structure

Sona BLW Precision Forgings announced that the company has successfully raised ₹2,400 crore through a qualified institutions placement (QIP). The company reported that the issue saw strong interest from institutions and funds resulting in the issue being oversubscribed 5.5 times. Following the announcement, shares of the company were trading higher by 1% at ₹707 per share.

The QIP opened on September 4, 2024, and was closed on September 9, 2024. Under the issue, Sona Comstar issued 3,47,82,608 equity shares to qualified institutional buyers (QIBs) at an issue price of ₹690 per share which included a premium of ₹680 per share over the face value of the shares.

The company stated that the issue garnered participation from large institutions such as SBI Mutual Fund, ICICI Prudential Mutual Fund, White Oak, Goldman Sachs Asset Management, Axis Mutual Fund, Aditya Birla Mutual, and Norges, amongst others.

Sona BLW said that the proceeds from the QIP will be put towards strengthening the company’s capital structure along with providing a boost to its organic and inorganic growth strategies.

Jefferies India and JM Financial were book-running lead managers (BRLMs) for the QIP.

Vivek Vikram Singh, managing director and group chief executive officer of Sona BLW Precision Forgings, said that the company will use the QIP proceeds to improve its capital structures and support growth. The response from large institutions highlights their trust in the company.

“We are committed to creating value for all who have entrusted their assets to us and are unwavering in our efforts. We will use the QIP proceeds to augment the company’s capital to pursue our growth ambitions,” he said.

In Q1FY25, the company reported a 27% year-on-year (YoY) rise in its net profit to ₹142 crore. The company’s revenue for the quarter saw growth of 22% YoY to ₹893 crore while the earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter clocked in a 23% YoY growth to ₹251 crore.

Shares of the company have risen by nearly 9.5% since the beginning of the year. The stock has gained over 17% in the past year.