Indian auto component maker Sona Group, which on Wednesday announced its decision to sell its entire stake in Sona Koyo Steering Systems Limited (SKSSL) to Japan's JTEKT Corporation, said it will focus on its forging business.
The group plans to invest Rs 300-400 crore over the next five years to grow revenues from its forging venture in India fourfold to Rs 2000 crore.
Sunjay Kapur, managing director, Sona BLW Precision Forgings, said, “This transaction will enable us to focus our attention, investments and energies in growing our precision forging business. We have global market share of 19-20% in this area. Given the way technology in the automotive industry is evolving, we want to be in the driver’s seat by owning the technology of the business we operate in. It will enable us to react to the technological disruptions happening quickly.”
Kapur said the Sona Group has made several customer acquisitions in the electric vehicles space and has announced opening of new facilities to strengthen the manufacturing capabilities of Sona BLW Precision Forgings.
In India, Sona Group currently clocks revenues to the tune of Rs 500 crore from its forging business. Kapur is aiming growing this to Rs 2000 crore over the next five year. This would entail investment of 300-400 crore in product development, capacity expansion, research and development work.
On Wednesday, Sona Group announced that it has signed an agreement with JTEKT Corp to sell its entire 25.12% equity holding in its flagship Sona Koyo Steering Systems (SKSSL) for Rs419.28 crore.
The deal was sealed at a price of Rs 84 a share, valuing the joint venture company at approx Rs 1,922 crore. This is the first strategic transaction by the Sona Group under the leadership of Kapur who took over the reins of the group after the sudden demise of its