Last updated on May 11, 2021
Sona Comstar – the newly created entity following the merger of Sona Group and Comstar Automotive Technologies – has set its eyes firmly on the electric vehicle (EV) business and also plans to list itself on stock markets in India. The merged entity is backed by private equity (PE) giant Blackstone Group. Sona Comstar IPO is expected to be launched in the next two years.
“Today it is predominantly internal combustion engines (ICE). Even though we are global suppliers, we are supplying mostly to ICE. However, all our new investments in 2019, especially, we are looking at a capital expenditure of close to USD30 million which would be geared towards electrification and hybrid,” said Sunjay Kapur, chairman of Sona Comstar, while adding that the combined sales of the two companies would be USD510 million.
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Sona Comstar: Engineered by Blackstone
It is worth noting that the common factor among the two pre-merger companies is Blackstone. The PE firm acquired Comstar in 2018 from Argyle Street Management and the Chandaria family. Comstar makes starting and charging systems for passenger and light commercial vehicles and its portfolio includes products such as Belt Starter Generator (BSG) and Integrated Starter Generator (ISG) systems, start-stop starter motors, BLDC motors, alternators and other electrical motors for hybrid vehicles.
On the other hand, Sona Group provides drivetrain products such as precision-forged bevel gears and differential assemblies for passenger, commercial and off-highway vehicles through Sona BLW Precision Forging Ltd. The Blackstone Group recently acquired 33% equity stake in Sona BLW.
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There is very little overlap between the two companies and thus, the merger is complementary in nature with the likely end result being and integrated electric drive unit to power drivetrains of electric vehicles. Blackstone has the majority shareholding of 65% in Sona Comstar while Sona Group owns the remaining 35%. The merger is part of Blackstone’s strategy to create an integrated platform in auto components space. As such, there could be more mergers and acquisitions for Sona Comstar before its IPO.
Update: Sona BLW IPO cleared by SEBI, Blackstone to part-exit
