Shares of Sona BLW Precision Forgings Ltd (Sona Comstar) climbed over 3% to ₹495.50 in early trade today after the company announced a strategic joint venture agreement with Jinnaite Machinery Co (JNT) to expand its presence in China.
According to an exchange filing, the stock gained as much as 2.14% from its previous close of ₹479.75 on the NSE. At the time of reporting, Sona BLW shares were trading at ₹490, within the day’s range of ₹485.10 – ₹496.45. The company’s market capitalization stood at ₹3.04 lakh crore.
In the announcement, Sona BLW said it has signed a binding term sheet with Jinnaite Machinery to form a joint venture (JV) in China to manufacture and supply driveline systems and auto components, with a focus on the growing electric vehicle (EV) market.
In the first phase of the JV, Sona Comstar plans to invest $12 million, while JNT will contribute $8 million worth of assets and business.
“As the largest electric vehicle market in the world and a leader in EV technologies, China offers tremendous opportunities for innovation and growth,” said Vivek Vikram Singh, MD & Group CEO, Sona Comstar. He added that the JV operations are expected to commence later this year and will cater to both EV and non-EV customers.
Jinnaite operates a foundry with patented technology for complex castings and molds, and supplies components to Chinese auto OEMs as well as customers in North America, Europe, and Japan.
The partnership is expected to leverage both companies’ strengths to become a key supplier of driveline solutions for EVs in the region.
