Shares of Motherson Sumi Wiring India (MSWIL), the home wiring arm of former Motherson Sumi (MSSL), were stuck in the 5% lower circuit at Rs 62.70 on BSE on Monday. By comparison, the S&P BSE Sensex rose 0.19% to 57,469 points. The stock had hit an intra-day high of Rs 69.30, after being listed at Rs 66 on the BSE.
On the National Stock Exchange (NSE), the stock was trading at Rs 62.45. It had reached a high of Rs 68.45 and a low of Rs 61.95 in intraday trading so far. A total of 21.5 million equity shares had changed hands on the NSE and BSE.
“The shares of Motherson Sumi Wiring India will be listed and admitted to trading on the Group T securities list,” BSE said in a notice dated March 24, 2022. The record date for the split was January. 17, 2022 with the shareholding of the former MSSL in the ratio of 1:1.
MSWIL is the market leader in the Indian wire harness industry, with an estimated market share of over 40%. It benefits from access to world-class technology (JV between Sumitomo Wiring Systems and MSSL). MSWIL derives the lion’s share of its revenue from India and has limited direct exports.
Brokerage ICICI Securities estimates that the entity commands higher valuations pegged at Rs 70 per share. “With pure exposure play in the domestic passenger vehicle (PV) industry, which is seeing healthy demand prospects and content/vehicle electrification expected to increase, we expect the entity to get higher valuations,” the brokerage adds.
The wiring harness sector is benefiting from the megatrends (of premiumization, increasing use of electronics and electrification) that are manifesting in the automotive industry, leading to an increase in content. “This, coupled with a strong JV partner and market leadership, has resulted in strong operational performance for MSWIL, as evidenced by sustained growth above underlying industry volumes, capital efficiency industry-leading and a strong balance sheet,” said Motilal Oswal. Financial services in a stock update.