Samvardhana Motherson International Ltd (SAMIL), a prominent auto components maker based in Noida, India, announced on Friday that it has successfully raised $350 million (approximately Rs 2,920 crore) through the issuance of notes. These notes were issued by its step-down subsidiary, SMRC Automotive Holdings Netherlands BV (SAHN BV), and are backed by a corporate guarantee from SAMIL.
The issuance was met with significant investor interest, being oversubscribed six times and reaching a peak order book in excess of $2.2 billion. This marks the Motherson Group’s return to the USD bond market after eight years, and it is the first time they have received a dual investment grade rating from two esteemed international credit rating agencies, Moody’s and Fitch.
Return to the USD Bond Market
Laksh Vaaman Sehgal, Vice Chairman of the Motherson Group, highlighted the significance of this milestone. “The success of this transaction is a testament to the Motherson Group’s adherence to its prudent financial policies, underscored by recent rating upgrades by various international rating agencies,” Sehgal said. The issuance of these notes underlines the group’s financial stability and market confidence.
Strategic Financial Move
The funds raised from this issuance are debt neutral, as they will be used to repay existing debt. This strategic move is expected to strengthen the company’s financial position and enhance its credit profile. The notes are set to be listed on the Frankfurt Stock Exchange, further increasing the company’s visibility and accessibility to international investors.
SAMIL’s Global Footprint
Samvardhana Motherson International Ltd is a renowned name in the automotive components industry, with a significant global presence. Based in Noida, India, SAMIL has established itself as a key player in the market, providing high-quality automotive parts to various international clients. The company’s return to the USD bond market and the successful issuance of notes reflect its robust growth and commitment to maintaining financial prudence.
Investor Confidence
The overwhelming response to the notes issuance indicates strong investor confidence in SAMIL’s future prospects and financial health. This move not only helps in debt management but also positions the company well for future growth and expansion. The dual investment grade ratings from Moody’s and Fitch further reinforce the company’s credibility and financial strength.
Conclusion
The $350 million raised through this oversubscribed notes issuance marks a significant achievement for Samvardhana Motherson International Ltd. It highlights the company’s strategic financial management and strong market position. As SAMIL continues to expand its global footprint, this successful transaction sets a positive precedent for future endeavors in the international financial markets.
