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Motherson Sumi shares jump over 18% on board nod for raising Rs 1,000 crore

Motherson Sumi on Monday said that its board had approved proposal to raise up to Rs 1,000 crore and delegated its committee of directors to evaluate and decide on various borrowing proposals

Chitranjan Kumar | April 15, 2020 | Updated 15:30 IST
Motherson Sumi shares jump over 18% on board nod for raising Rs 1,000 crore
Motherson Sumi Systems share price rose as much as 18.28 per cent to hit an intraday high of Rs 74.70 apiece on the BSE

Shares of Motherson Sumi Systems rallied over 18 per cent in intraday trade on the Bombay Stock Exchange on Wednesday after the auto component manufacturer unveiled plan to raise funds. The company has announced to raise Rs 1,000 crore to boost liquidity.

Motherson Sumi Systems share price rose as much as 18.28 per cent to hit an intraday high of Rs 74.70 apiece on the BSE after opening higher at Rs 64.50 against previous close level of Rs 63.15.

There was also spurt in volume trade as 17.07 lakh shares changed hands over the counter as compared to two week average volume of 9.60 lakh shares.

In a similar trend, Motherson Sumi shares were trading 13.86 per cent higher at Rs 71.90 per cent on the National Stock Exchange (NSE). The scrip touched an intraday high of Rs 74.80 against previous closing price of Rs 63.15.

In a filing to exchanges, Motherson Sumi on Monday said that its board had approved proposal to raise up to Rs 1,000 crore and delegated its committee of directors to evaluate and decide on various borrowing proposals.

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The firm, whose plants in India, Europe and the US are  temporarily closed due to coronavirus, said it has strong liquidity position. As of March 31, 2020, the company had consolidated cash reserve of Rs 4,690 crore with 412 million euro being cash at SMRPBV (Samvardhana Motherson Automotive System Group BV), a joint venture between SAMIL and Motherson Sumi. The company had consolidated drawable committed/uncommitted facilities of Rs 5,500 crore with 458 million Euro (committed lines) at SMRP BV.

"Our team has done a phenomenal job in almost doubling MSSL's turnover over the last 5 years to $9.6 billion (approx Rs 63,000 crore) on an unaudited basis," said Motherson's Chairman Vivek ChaandSehgal.

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"Our aspirational 5-year plans cannot be timed perfectly, and the unprecedented COVID-19 situation has hindered us in closing many target acquisitions. However, we believe that these same opportunities have become more attractive in valuations since the COVID crisis," he added.

In a separate filing, the company said its board will meet on April 16 to approve a proposal to raise Rs 500 crore through issuance of rated, secured, listed, redeemable non-convertible debentures (NCDs). The fund will be raised in one or more tranches, it said.

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