Samvardhana Motherson defers IPO due to poor response
In the light of weak equity market conditions and volatile currency movements, Samvardhana Motherson Finance today deferred its Rs 1,665-crore initial pubic offer, which opened on May 2.business Updated: May 04, 2012 21:32 IST
In the light of weak equity market conditions and volatile currency movements, Samvardhana Motherson Finance on Friday deferred its Rs 1,665-crore initial pubic offer, which opened on May 2.
Samvardhana Motherson Finance, which is a leading components supplier to automotive industry, had earlier proposed to raise Rs 1,665 crore through public issue, which include a fresh issue of Rs 1,344 crore and an offer for sale of Rs 321 crore by Radha Rani Holdings.
The offer opened for subscriptions on May 2 but the company received only 23.17 % bids till 3.00 pm on Friday, the last day of subscription.
"On the advice of the book running lead manager, we have decided to defer our proposed public offer. While we have received a significant interest from potential investor, we believe the continued volatility in the equity and currency markets is not conducive for listing the shares and a good after market performance," a company statement said.
The company was looking at using issue proceeds of Rs 1,344 crore for funding pre-payment and repayment of debt with Rs 338.5 crore, funding strategic investments with an outlay of Rs 627.5 crore and funding investments in rear-view vision systems business with cost of Rs 156 crore.
Samvardhana is an integrated design and manufacturing company providing full system solutions to diverse industries.
The company supplies automotive components to original equipment manufacturers like Volkswagen Group, BMW, Daimler, Renault, Nissan, Ford, Volvo Car, Maruti, Tata Motors, Honda, Toyota and Fiat.