Motherson Sumi Wiring lists after the breakup; Freezes at 5% low circuit

Shares of Motherson Sumi Wiring India (MSWIL), the domestic wiring harness arm of former Motherson Sumi (MSSL) company, closed in the lower circle 5 per cent at Rs 62.70 on BSE on Monday. By comparison, the S&P BSE Sensex was up 0.19 percent at 57,469 points. The stock reached an intraday high at Rs 69.30, after being listed at Rs 66 on BSE.

On the National Stock Exchange (NSE), the stock was trading at Rs 62.45. It has reached highs of Rs 68.45 and Rs 61.95 in daily trading so far. 21.5 million shares of the combined stock were traded on the NSE and BSE exchanges.

“The equity shares of Motherson Sumi Wiring India will be listed and accepted for trading on the exchange in T Group Securities,” BSE said in a notice dated March 24, 2022. The standard demerger date was January 17, 2022 with the previous MSSL contribution in a 1:1 ratio.

MSWIL enjoys market leadership in the Indian wire industry, with an estimated market share of more than 40 per cent. It has access to world-class technology (JV between Sumitomo and MSSL wire systems). MSWIL derives the lion’s share of its revenue from India and has limited direct exports.

Brokerage ICICI Securities believes the entity will govern premium valuations linked to Rs 70 per share. The brokerage adds: “With a pure supply in the domestic passenger car (PV) industry, which is seeing healthy demand prospects and content/vehicles set to increase in electrification, we expect the entity to demand excellent ratings.”

The wire harness business is capitalizing on the huge trends (exclusivity, increased use of electronics, and electrification) that are playing out in the automotive industry, driving up content. Motilal Oswal said: “This, along with a strong joint venture partner and market leadership, has led to strong operating performance by MSWIL, as reflected in sustainable growth above core industry volumes, industry-leading capital efficiencies, and a strong balance sheet.” . Financial services in inventory update.

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