InvestorQ : Why is Motherson Sumi planning to aggressively raise funds in the bond market?
diksha shah made post

Why is Motherson Sumi planning to aggressively raise funds in the bond market?

Answer
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swati Bakhda answered.
3 weeks ago


Over the last 20 years, Motherson Sumi has been known to make aggressive plans and also delivery growth. It plans to continue its growth story in the next five years but the first priority is to get over the current pandemic crisis and for that it needs to raise funds.

Towards that end, Motherson Sumi plans to raise up to Rs.3000 crore through the issue of non-convertible debentures or NCDs. The NCDs will have a tenure of 3 years and the coupon rate is expected to be competitive in the current market conditions.

Motherson Sumi is India’s largest auto ancillary company and is one of the major suppliers of auto parts to auto majors across the US and Europe. As a result, the company has been hit by the global demand slowdown and the woes of the auto sector in general.

The fund raising is proposed to take care of the liquidity mismatches and also to keep a war chest ready in the post COVID growth scenario. Despite the loss of Rs.1192 crore in the Jun-20 quarter, the company wants to ensure that its plans are not impacted.