Sansera Engineering, a company specializing in the production of connecting rods for two-wheelers and steering components for passenger vehicles, is preparing to raise ₹1,000-1,400 crore through a qualified institutional placement (QIP).
This move follows approval from the company’s board last month to raise ₹1,200 crore by issuing new shares to institutional investors. Additionally, the board authorized an increase in the company’s share capital from 23.0 crore shares to 30.5 crore shares.
The Bengaluru-based manufacturer, which supplies parts to major automakers like Maruti Suzuki and Bajaj Auto, has appointed ICICI Securities to manage the fundraising process. The company has already started roadshows to engage institutional investors. Since its initial public offering (IPO) in September 2021, Sansera’s valuation has risen from ₹3,800 crore to approximately ₹9,300 crore, in line with its stock performance.
This marks the first equity fundraising effort by Sansera since its ₹1,283 crore IPO. According to insiders, the QIP issue is expected to launch soon and has garnered significant interest, particularly from investors looking to diversify into non-automotive sectors such as defense components, as the company expands beyond its traditional focus on internal combustion engine (ICE) technologies.
Sansera’s order book has grown significantly, reaching ₹1,685 crore, nearly double what it was two years ago. Currently, 76% of its revenue comes from the automotive ICE segment, 12% from the tech-agnostic/EV segment, and the remainder from non-automotive sectors. In terms of product contribution, connecting rods lead the revenue generation, followed by crankshafts (17%), rocker arms (15%), gear shifter forks (5%), and other components.
At the current market price of ₹1,700 per share, the company will likely need to dilute 13-15% of its equity to meet the fundraising target. The promoters hold a 34.78% stake in the company, while mutual funds, insurance companies, and foreign portfolio investors collectively hold about 48.36%.
From FY22 to FY24, Sansera Engineering’s revenue grew by 19% annually, reaching ₹2,811 crore, with profits also rising to ₹187.5 crore over the same period. As India’s largest connecting rods producer and one of the top 10 globally, the company continues to benefit from growing demand in both domestic and international markets, especially for higher-displacement two-wheelers and lightweight components like aluminum-forged parts.
Sansera Engineering is also looking to expand its footprint in the aerospace sector, supplying precision components for actuation systems and landing gear to companies like Raytheon, Saab, and Triumph Group. The company has invested heavily in capital expenditure, with ₹341 crore spent in FY23 and FY24 on plant equipment, facility expansion, and maintenance.
Over the next 3-5 years, Sansera plans to invest ₹2,100 crore to boost its capacity, with a focus on increasing exports, which currently account for one-third of its revenue. The company aims to further enhance its product offerings by investing in lightweight and aluminum-forged components, driving future growth.
