Blackstone exits Sona BLW Precision; stock gains – CLSA cuts target but bullish on growth

Sona Comstar share price: Shares of Sona BLW Precision Forgings (SONACOMS) staged a rally on Tuesday, after private equity firm Blackstone affiliate Singapore VII Topco III sold its 20.50 per cent stake in the auto parts maker for Rs 4,917 crore through an open market transaction. The Sona BLW Precision stock gained as much as seven per cent to Rs Rs 433.9 apiece on BSE.

Blackstone exits Sona BLW news

The buyers of shares included the Government of Singapore, BNP Paribas Arbitrage, Fidelity Asian Values and Societe Generale.

As of the end of December 2022, promoter Singapore VII Topco III Pte owned a 20.5 per cent stake in Sona BLW Precision Forgings.

CLSA bullish on Sona BLW Precision

Brokerage CLSA maintained a ‘buy’ rating on Sona BLW Precision Forgings after the news, but reduced its target price by Rs 37 to Rs 529 per share.

The brokerage said Blackstone's exit has not changed its thesis, citing the company’s strong and growing order book, and the auto ancillary company’s margin is likely to increase driven by the production-linked incentive (PLI) scheme.

Sona BLW share price: Historical performance 

Sona BLW shares have lost about one-third of their value in the last one year, a period in which the Sensex index has risen 2.5 per cent.

Sona BLW Precision: Company profile

Sona BLW Precision Forgings (Sona Comstar) is one of the world's leading automotive technology companies. Founded in 1995, Sona BLW has headquarters in Gurugram.

Sona Comstar, which was formed by the merger of Sona BLW and Comstar Automotive in 2019, is primarily engaged in designing, manufacturing and supplying of engineered, mission-critical automotive systems and components to automotive original equipment manufacturers.

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