Samvardhana Motherson launches QIP to raise funds

17 Sep 2024 , 11:14 AM

Samvardhana Motherson International Ltd. has initiated a Qualified Institutional Placement (QIP) to collect cash.

The auto component manufacturer’s board approved the institutional share sale on Monday evening, according to an exchange filing.

According to sources, the equity offering will be for ₹6,398.6 Crore, resulting in a 5% dilution of total equity.

The QIP’s floor price of ₹188.85 represents a 2.6% decrease from Samvardhana Motherson’s closing price on Monday.

The corporation may offer a 5% discount on the QIP floor price at its discretion. The profits will most likely be used to fund an acquisition or to pay down current debt.

Over the weekend, Samvardhana Motherson announced the purchase of an 11% share in Israel-based, US-listed REE Automotive for $15 million.

In the June quarter, Samvardhana Motherson had a gross debt of ₹20,114 Crore and a net debt of ₹13,370 Crore. During the April-June quarter, the company’s gross debt climbed by 16% while its net debt increased by 29% sequentially.

In addition to the equity share offering, Samvardhana Motherson is issuing Compulsorily Convertible Debentures (CCDs) for subscription by eligible institutional investors. According to sources, the CCDs total ₹2,250 Crore.

Each CCD has a face value of ₹1 lakh and is unsecured and subordinated to the company’s senior debt obligations.

The CCDs will convert into equity shares at a 13.83% discount to the conversion volume weighted average price of ₹188.85, subject to a 5% discount determined by the firm.

At around 10.24 AM, Samvardhana Motherson was trading 1% lower at ₹191.85, against the previous close of ₹193.79 on NSE. The counter touched an intraday high and low of ₹197, and ₹189.60, respectively.

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