Shares of this EV stock focused on manufacturing components for automotive OEMs, surged nearly 1 percent following its acquisition of REE Automotive Ltd., Israel, and joint venture with Japanese company Hamakyorex Company Ltd.
Share Price Movement
In Monday’s trading session, Samvardhana (NS:SAMD) Motherson International Ltd’s share price jumped 4.86 percent to an intra-day high of Rs.192.35, up from its previous close of Rs.190.55. The price has since eased to Rs.191.15 per share.
Is Samvardhana Motherson a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
Acquisition Details
Samvardhana Motherson International Limited (SAMIL), through its wholly-owned subsidiary MSSL Consolidated Inc. (or its affiliates), will subscribe to up to 36,39,010 Class A Ordinary shares of REE Automotive Ltd. at $4.122 per share. This investment will result in up to 11 percent fully diluted and up to 19 percent non-diluted shareholding in REE Automotive Ltd, an Israeli EV company.
SAMIL is now the exclusive partner for managing REE Automotive’s complete supply chain, handling sourcing and module integration.
The arrangement utilizes SAMIL’s global operations for efficiency and supports the assembly of REE’s “REEcorner” modules and P7 electric trucks in the USA. REE has secured an order book of approximately 600 trucks for delivery by 2025. Subject to fulfilling all conditions precedent, the transaction is anticipated to close within 30 days.
Joint Venture
SMRC Automotive Holdings Netherlands B.V. (“SAHN B.V.”), a wholly owned subsidiary of Samvardhana Motherson International Limited, has approved a Joint Venture Agreement with Hamakyorex Co. Ltd. of Japan.
The Joint Venture Company will have an authorized share capital of JPY (Japanese Yen) 2,00,00,000, divided into 4,000 shares of JPY 50,000 each. The initial issued and paid-up capital will be JPY 50,00,000, with 1,000 shares of JPY 50,000 each. Motherson will hold 51 percent and Hamakyorex 49 percent of the shares.
Motherson and Hamakyorex, already partnered in finished vehicle logistics in India since 2019, are expanding their collaboration. They will form a new joint venture to provide comprehensive logistics services, including 3PL, warehousing, packaging, and EXIM solutions, in Japan or other agreed locations.
Financial Performance
For the quarter ending June 2024, Samvardhana Motherson reported a notable net profit of Rs.1,097 crore, up 69.3 percent from Rs.648 crore in Q1 FY24. Revenue from operations surged to Rs.28,868 crore, a 29 percent increase from Rs.22,462 crore in the same period.
Company Profile
Samvardhana Motherson International Ltd, based in Noida, is an Indian multinational specializing in automotive components. The company produces wiring harnesses, plastic parts, and rearview mirrors for passenger vehicles.
Written by – Siddesh S Raskar
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