9JULY 2024TOP STORIESOPTIEMUS INFRACOM INVESTS RS.140 CRORE IN ITS DRONE-AS-A-SERVICE SUBSIDIARYSAMVARDHANA MOTHERSON SUCCESSFULLY RAISES $350M VIA BONDSOptiemus Infracom, a domestic wearables and telecom equipment manufacturer, announced plans to invest around Rs 140 crore in a drone-as-a-service model through its subsidiary, Optiemus Unmanned Systems (OUS). This investment aims to achieve a revenue target of Rs 600-900 crore by the end of 2025.Founded in 2023 with an initial investment of Rs 25 crore, OUS recently unveiled a range of drones designed for agricultural and mapping applications. The company intends to adopt a service model for its drone business, training 6,000 pilots to manage a fleet of 5,000 drones by the end of 2025.Ashok Kumar Gupta, Chairman of Optiemus Infracom, emphasized the unique business model based on extensive ground-level research that identified issues such as operational know-how and spare parts scarcity. He highlighted the significant potential of the drone business, particularly in agricultural and defense sectors, and expressed confidence in leveraging their expertise to offer cost-effective and efficient solutions.OUS aims to achieve a minimum of 65 percent local value addition in its drones, with plans to increase this to 75 percent by the end of the current fiscal year. The company has already indigenized various components, including the power distribution board, anti-spark switch, flight controller, airframe, and motor. Samvardhana Motherson International, an auto parts manufacturer, successfully raised $350 million by issuing five-year bonds to overseas investors. The bonds, sold through its subsidiary SMRC Automotive Holdings Netherlands, were priced late on Wednesday at 140 basis points above the five-year US Treasury rate, which is currently around 4.30 percent, yielding an overall rate of 5.72 percent after costs.The funds from this bond issue will be used to refinance existing debt maturing later this month, according to sources familiar with the matter. Samvardhana Motherson provided an unconditional and irrevocable corporate guarantee for the bonds, as disclosed in a recent stock market announcement.The final pricing of the bonds was tighter than the initial price guidance of 175 basis points above the five-year US Treasury, largely due to the total order book reaching $2.20 billion. This strong demand allowed the company to secure more favorable terms.JP Morgan, MUFG, DBS Bank, and BNP Paribas were among the banks involved in the issuance. The raised funds will primarily refinance a 300 million euro bond maturing later this month.In June, Moody's upgraded the long-term ratings for both Samvardhana Motherson International and SMRC Automotive from Ba1 to Baa3 with a stable outlook, citing improved profitability and cash flows. Kaustubh Chaubal, a senior vice president at Moody's, highlighted that the upgrade to investment grade reflects the sustained strengthening in Samvardhana Motherson's financial metrics, improved scale, diversification, and profitability following the integration of several acquisitions.
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