Investing.com — Auto tech company Sona BLW Precision Forgings, aka Sona Comstar, has launched its IPO today with an issue price of Rs 285 – Rs 291 per share. The IPO is worth Rs 5,500 crore and the company plans to use the proceeds of the sale to pare debt and general expenses.
The company is backed by private equity player Blackstone (NYSE:) and the IPO has received a subscribe rating from many analysts. ICICI Direct said that the valuation for the company is pretty high at a multiple of 74 times FY21 EPS and 11 times market-cap sales.
However, it said that it is a good buy for the long-term. It said, “Nevertheless, we believe the company offers a good investment case on the back of strong growth prospects. Accordingly, we recommend Subscribe only for long-term.”
Religare Broking seconded ICICI Direct. It said, “Going ahead, the focus will be on R&D and to innovate new products across segments especially EV space as it has high growth opportunities. On the financial front, performance has been encouraging with revenue and operating matrix growing at a steady pace. Also, it has a strong balance and decent cash flow. From a long-term perspective, we have a positive view of the company.”