INTERVIEW: An auto parts maker for Maruti, Bajaj and Honda is betting that Indian car makers will take a leaf out of Tesla’s playbook
- Our focus is on aluminium forged components as the vehicles are going to get light weighted across segments because of the emissions norms, said B R Preetham, group chief executive officer at Sansera Engineering in an interview with Business Insider.
- Sansera Engineering IPO is opening from today and closes on September 16.
- The company has already mopped up ₹382 crore from anchor investors ahead of the IPO while it is looking to raise ₹1,282 crore from an offer for sale of 1.72 crore shares.
- Check out the latest news and updates on Business Insider.
AdvertisementJust like Audi, BMW, Nissan and Porsche, are now making the switch from steel to aluminum for lightweight batteries in electric cars, reportedly, influenced by Tesla’s aluminum based design, an Indian auto parts maker opening its initial public offering today is hoping that Indian customers like Maruti, Bajaj Auto and Honda will also do the same.
“One of our focused areas is aluminium forged components as you are aware the industry is going to get light weighted both in passenger vehicles and two-wheelers whether it is electric or not. Lightweighting is going to happen because of the emissions norms,” said B R Preetham, group chief executive officer at Sansera Engineering in an interview with Business Insider.
Aluminium is lighter than steel, better for recycling and reduces emissions. Due to its upcoming IPO compliance requirements, Preetham did not reveal their overall investment towards this segment but mentioned, “we have invested a lot in the aluminium forgings and thereby expect increasing revenue from it further,” said Preetham.
Sansera Engineering’s IPO opens today and closes on September 16
The company is looking to raise ₹1,282 crore from an offer for sale of 1.72 crore shares at a price band ₹734-744. Ahead of the IPO, the company had mopped up ₹382 crore from anchor investors. Government of Singapore, Abhu Dhabi Investment Authority, Axis MF, ICICI Prudential MF are some of the anchor investors who bought the IPO.
The allotment of the shares will be revealed on September 21 and the shares will be listed on September 24. The verdict from analysts has been a mixed one. Ventura Securities argues that the IPO is overpriced and that the return on investment may be the worst in the sector. Whereas, those at BP Wealth rated the IPO as ‘subscribe’ citing “the strong product portfolio, advanced manufacturing capabilities and robust track record.”
|Existing shareholders selling via IPO||Current stake||Stake to be sold via IPO|
|Client Ebene||33.85%||86.35 lakh shares|
|CVCIGP II Employees EBENE||18.96%||48.36 lakh shares|
|S Sekhar Vasan||22.90%||20.58 lakh shares|
|Unni Rajagopal K||6.36%||5.71 lakh shares|
|D Devaraj||5.11%||5.71 lakh shares|
|FR Singhvi||6.27%||5.71 lakh shares|
This is Sansera Engineering’s second attempt to go public. Earlier, it had filed for an IPO with the market regulator in August 2018. Reportedly, it had received a nod to float the public issue, but it did not go ahead with the launch.
Sansera wants a share in the electric vehicles pie
Meanwhile, the company is also expanding its component services to the electric vehicle segment.
“Only 6% of our business is under that (electrification). But having said that we have already started our journey into electrification, we have secured orders from new age startups who are setting up huge facilities for electric two wheelers. We are going to supply about 8 components to them,” added the company management in an interview. On being asked if the new customer was Ola, Preetham refused to disclose the name of the customer but said that it was, indeed, a well-known startup.
As of July 31, 2021, Sansera Engineering has 16 manufacturing facilities, of which 15 are in India in the states of Karnataka, Haryana, Maharashtra, Uttarakhand and Gujarat, and one facility is in Trollhättan, Sweden
Within the automotive sector, the company manufactures and supplies a range of precision forged and machined components and assemblies, such as connecting rod, rocker arm, crankshaft, gear shifter fork, stem comp, and aluminium forged parts. Within the non-automotive sector, it manufactures and supplies a range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods.
SEE ALSO: Online pharmacy Startup PharmEasy is looking to hire 200 engineers in Hyderabad, Pune and Delhi before the IPO
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