Motherson Sumi Tanks Over 20% Ahead of Record Date for Demerger on Friday

ByInvesting.com

Jan 14, 2022



Motherson Sumi Tanks Over 20% Ahead of Record Date for Demerger on Friday -

By Malvika Gurung

Investing.com — Shares of the automotive components supplier and manufacturer Motherson Sumi Systems (NS:) slid 20.2% to Rs 187.25 apiece at 12:05 pm on Friday, before the record date for demerging its domestic wire harness business.

The company intimated the stock exchanges of setting the record date for demerger of business to January 17, meaning that the company’s existing stock would trade ‘ex-domestic wiring harness’ business, starting Friday.

Intending to unlock value from the wiring harness business, the auto ancillaries major announced to demerger the segment from its existing entity and list it separately by March, under the name Motherson Sumi Wiring India, while the existing company will merge into Samvardhana Motherson International (SAMIL), the company held by the promoter.

Doing so will enable simplifying the group structure and creating a strong growth platform. ETIG pegs the fair value of SAMIL at Rs 170-230/share, while that of the demerged business at Rs 60-80 apiece.

Furthermore, shareholders of the company will get one share each, of the demerged domestic wiring harness entity and the existing entity.



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