Motherson Sumi hits IPO speed bump

The stock of Motherson Sumi will be under pressure this week. Its holding company Samvardhana Motherson Finance Ltd (SMFL) last week was forced to withdraw its public issue due to the poor response from investors. SMFL holds 36.12 per cent stake in Motherson Sumi Systems. SMFL had planned to raise Rs 1,665 crore. The Samvardhana IPO could mop up only about 23 per cent of the total book size. SMFL is a core investment company that produces components such as rear view mirrors, cockpit assemblies, bumpers, door trims, wiring harness, lighting and air-conditioning systems for the auto industry through subsidiaries and joint ventures. The company's plan was to raise about Rs 1,344 crore for repaying debt incurred by the group and for funding investments in some ventures/subsidiaries in the group. The reaction to Motherson Sumi stock could be a sentimental one rather than a fundamental call.