JM Financial India Fund, a US$ 200 million corporate private equity fund, sponsored by JM Financial Limited and Old Lane Partners LP, shall invest Rs.120 crore in the Sona Group (with an option to invest another Rs.40 crore at a later stage), through a holding company that shall own investments in Sona Group companies including Sona Koyo Steering Systems Ltd, Sona Okegawa Precision Forging Pvt Ltd. and other Sona Group Companies in the auto-ancillary space.
The Sona Group is a leading manufacturer in the auto ancillary space with a diversified product range and enjoys industry leadership position in steering systems and precision forged gears. The Sona Group has technology tie-ups with international joint-venture partners such as JTEKT Corporation (formerly Koyo Seiko Co. Ltd.) and Mitsubishi Materials Corporation. The Sona Group has won numerous awards including the prestigious Deming prize for quality.
The investment by JM Financial India Fund will be used to expand capacities in the Sona Group’s subsidiary companies to meet their robust domestic and export demand as well as potential acquisitions.
Dilip Kothari, the founding Managing Director of JM Financial India Fund, said, “Global OEMs and Tier-1 companies are increasingly outsourcing critical components and processes to India for sustainable cost benefits. The Sona Group, with its reputed technology partners, internationally diversified customer base and a strong management team is well poised to take advantage of this outsourcing opportunity. Our investment will be used towards scaling up their capacities to a globally competitive size, with an aim of consolidating their market leadership position.”
Dr. Surinder Kapur, the Chairman of the Sona Group, added “The Sona Group has worked closely with the JM Financial Private Equity team and structured a unique investment holding company. The transaction was created by leveraging JM Financial’s vast experience in deal structuring and execution. Apart from maintaining our dominant position in the domestic market, the Sona Group will also look to leverage its intrinsic strengths to further expand our position in international markets.”
Source : Moneycontrol