In 2018, Blackstone took a deep dive into the automotive industry when it acquired Comstar Automotive Technologies – a company known for creating the world’s lightest starter motor. It then went a step further by acquiring a majority stake in automotive drivetrain solutions specialist Sona in 2019. Following this, Blackstone merged the two companies to form Sona Comstar, creating a company specialising in electric vehicle automotive technology.
During its investment period, Blackstone created a five-year strategic plan focused on electrification, diversification of products, customers, and increased investments in technology and business development.
The merger enabled the two companies to combine their R&D, engineering and technological capabilities, with Blackstone creating a new technological product roadmap designed to transform the combined company into a fully fledged EV supplier, with a goal of building an integrated electric drive unit.
Blackstone also enhanced the R&D functions of the company, particularly focusing on traditional hardware capability, system design and integration capability, and software capability. As part of these efforts, the company recruited additional R&D engineers. It also brought on board new tech partners to facilitate further product development.
Blackstone introduced cost management initiatives to help Sona Comstar reduce costs without impacting operations – initiatives that have proved essential in helping the company navigate covid-19. In addition, Blackstone developed a business development programme for exports, which resulted in new orders amounting to more than 50 percent of revenue in 2019-21.
New recruits
To strengthen the management team, Blackstone hired a new managing director and group CEO, as well as a new group CFO. The firm also appointed two directors to provide additional operational and sector expertise to the board and nominated its own head of Asia private equity and a managing director to represent Blackstone on Sona Comstar’s board.
$750m
IPO
226%
Year-on-year revenue growth in Q2
In the second quarter of 2021, Sona Comstar achieved 226 percent year-on-year revenue growth, driven by the increasing contribution of EV revenue and global market share gains.
In June, Blackstone partially exited Sona Comstar through a $750 million IPO. It is understood to be the largest IPO by a PE-firm-controlled company in India and the largest IPO by an Indian industrial company.
As of 9 September, the company’s share price had appreciated 89 percent over the IPO price.
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