Motherson Sumi Said to Price $300 Million Deal as Yes Bank Failsby and
Daimler parts supplier Motherson Sumi boosts share sale size
Yes Bank cites volatility for scrapped $1 billion offering
Indian automotive supplier Motherson Sumi Systems Ltd. is poised to raise $300 million in a share sale, people with knowledge of the matter said, after Yes Bank Ltd. scrapped India’s biggest offering of new stock in more than two years.
Motherson Sumi boosted the size of the sale from the base offering of $250 million, after receiving orders for nearly 1.5 times the amount of stock available, according to the people. The country’s biggest auto parts maker plans to price the stock sale at 317 rupees per share, the low end of a marketed range, the people said, asking not to be identified as the information is private.
The offering from Motherson Sumi, which started Thursday night, contrasts with Yes Bank’s failed $1 billion institutional share sale. Yes Bank, this year’s best-performing member of the S&P BSE Bankex index, said Thursday it would pull the deal due to extreme trading volatility because of investors’ misunderstanding of new equity offering guidelines.
Motherson Sumi shares rose 0.3 percent to 330.60 rupees at 3:19 p.m. in Mumbai trading Friday, while India’s benchmark S&P BSE Sensex index fell 0.9 percent. The supplier to Daimler AG will raise another 5.6 billion rupees from Japan’s Sumitomo Wiring Systems Ltd., which already owns about a quarter of the company, according to an exchange filing.
JM Financial Ltd., UBS Group AG, ICICI Securities Ltd., IDFC Ltd. and IIFL Holdings Ltd. were among bankers arranging the share sale, people with knowledge of the matter said in August. A spokesman for Motherson Sumi didn’t immediately respond to an e-mail seeking comment.
The canceled Yes Bank offering would have been the biggest sale of new stock since State Bank of India’s $1.3 billion deal in January 2014, according to data compiled by Bloomberg. It marks the first time an Indian lender had pulled a share sale since at least 2011, the data show. Shares of Yes Bank tumbled as much as 6.1 percent in Mumbai trading on Friday.
Other recent equity offerings from Indian financial institutions have received strong demand from investors, with RBL Bank Ltd.’s $191 million IPO in August getting orders for about 70 times the stock available, according to data from the National Stock Exchange of India Ltd. The May first-time share sale from Ujjivan Financial Services Ltd. was 40.6 times covered, and shares of the microfinance lender have more than doubled since they began trading.
Yes Bank said in an e-mailed statement it’s “fully geared” for the share sale after receiving all necessary approvals, and it plans to restart the offering “sooner” rather than later. The lender intends to continue working with its investment bankers on the deal, according to the statement.
Citic CLSA Capital Markets Ltd., Goldman Sachs Group Inc. and Motilal Oswal Financial Services Ltd. were global coordinators for Yes Bank’s canceled offering, data compiled by Bloomberg show. A spokeswoman for Citic CLSA declined to comment, while representatives for Goldman Sachs and Motilal Oswal didn’t immediately respond to e-mails seeking comment.