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Minda Corp Hits Record High, Shares Jump 4% Ahead of Board Fundraising

Shares of auto parts maker Minda Corporation Ltd hit record high on Tuesday after the company said it had bagged a Rs 750 crore contract.

Shares of Minda Corporation hit a fresh high of Rs 294.20, up 4% in intraday trade on Friday, amid a flat market ahead of today’s board meeting to consider fundraising proposals. Shares of the auto parts and equipment company surpassed the previous high of Rs 290 hit on May 23, 2023. In contrast, the S&P BSE Sensex rose 0.07% to 62,471 at 10:44 am.

A meeting of the company’s board of directors is scheduled for Friday, June 2, 2023, to discuss and consider ways of raising capital through the issue of equity or any other equity-based instrument/securities, Minda Corporation said in a May 30 exchange filing, a preferential offering, a qualified institutional placement or rights issue, or through any other permissible mode or any combination of any of the previous.

Shares of Minda Corporation have soared 43% so far in 2023, compared with the S&P BSE Sensex’s gain of 2.1%.

Spark Minda’s flagship company, Minda Corporation, has a diverse product portfolio that includes mechatronics, information and connectivity systems for automotive OEMs, and plastics and interiors. These products are suitable for 2/3 wheelers, passenger cars, commercial vehicles, off-road vehicles and the aftermarket. The company has a diverse customer base, including Indian and global OEMs and Tier 1 customers.

Minda Corporation outperformed the industry in FY23, with operating income up 45% YoY to Rs 4,300 crore. EBITDA margin for the year improved by 83 basis points to 10.7%. The company achieved its 11th consecutive quarter of double-digit EBITDA margin.

The company said new customers and product additions drove the growth and premiumisation across products leading to increased suite value and business with existing and new customers.

The automotive industry has shown satisfactory performance in various fields. The domestic auto market grew positively, mainly due to solid urban sales. However, exports continue to face challenges due to global geopolitical factors. Demand for two-wheelers remains subdued amid concerns over affordability and rising fuel costs.

Demand for passenger vehicles remained strong due to strong orders from OEMs and new product launches. In addition, the government’s accelerated infrastructure spending has also contributed to the rise in demand for commercial vehicles. Minda Corp said the tractor segment experienced significant growth, exceeding expectations with strong double-digit growth.

During the year, Minda Corp made a financial investment of Rs 400 crore in Pricol from the open market, acquiring a 15.7% stake. The company said it has applied to the Competition Commission of India (CCI) to acquire up to 24.5% stake at this stage, meeting all governance and compliance requirements.

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