Samvardhana Motherson International Limited (517334) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the conference call of Motherson Sumi Systems Limited. [Operator Instructions] I now hand the conference over to Mr. Vivek Chaand Sehgal. Thank you, and over to you, sir.

Thank you very much. Good morning, ladies and gentlemen. Welcome to this special call of Motherson Sumi based on the Board meeting that was held yesterday. We have tried to take the -- a whole particular matter, very, very openly, clearly, transparently in front of everybody. The Board has requested for the committee to appoint advisers, investment bankers and lawyers who can then tell us or make a proposal for us, which would be on the lines as what has been decided, which is that Motherson Sumi would split into 2 companies and -- identical companies. And we would then, after that, study that particular proposal. And then eventually put it for the EGM or as the law would decide, the procedure for the figures deemed fit. I think more will be answered by the people who are here. With me today is Pankaj, who's the COO; we also have Gauba, the CFO; we have Raghu C.V., who's our Lead Counsel and also the legal representative of Motherson Sumi. So we all are here to answer your questions and doubts, if any. And we thank you to [indiscernible]. Thank you.

Sir, shall we start with the question-and-answer session?

Yes, please.

[Operator Instructions] The first question is from the line of Chirag Shah from Edelweiss.

Yes. And congrats for this move. Sir, 2, 3 questions I have. One, just a clarification. So only the India wiring harness business would stay in 1 company, not the total wiring harness, right? But PKC, [ off the wall ] et cetera, would be in the 100% subsidiary. And similarly, from SAMIL only, SMRPBV will be merged, not some of the other related businesses will also be a part of the 100% subsidiary? Because we have some like Hyundai in some of the other businesses also over there. So if you could just elaborate slightly on that.

Sure. We have -- what we have discussed with Sumitomo-san also is that the Indian business of wiring harness was the original reason why we had set up this particular joint venture with them in 1986, and they want that we should be bringing it back to that particular situation. So only the domestic wiring harness business in India will be in this subsidiary -- or this split company which has come up. And [ junction ] and other joint ventures will go on to the other side. So for ease of everybody, what we will do is we will divide it as MSSL 1 and MSSL 2. MSSL 2 being the company which is having the non-wiring harness business of Indian domestic [ distributable debt ]. In MSSL 2, all the joint ventures will go over there. That's the plan. And you are right, in SMRPBV, only we want to merge the 51% and 49% together. The other companies of SAMIL will not be a part of this particular issue. Gauba?

Yes. Chirag, the our whole idea is to make it very simple and transparent, as Mr. Sehgal emphasized in the background, because the market is well -- and we are trying to get a leaner valuation, leaner shareholding, so that [indiscernible] is very [indiscernible]

So nothing [indiscernible] on the valuation.

Sir, this is really a great move. And sir, does this also help you in any way to pursue your M&A strategy slightly better? Because especially in the wiring harness business, will it help you to pursue your M&A strategies better, which is non passenger vehicle wiring harness, like the PKC 1. And apart from that also, any related business in the polymer or in the mirror side, does this help you to pursue M&As in a better way?

I think our M&A strategy doesn't become better or worse really. What actually happens is that Sumitomo-san has credit too and other obligations which is there. So we are free from this particular part. So we can pursue our goals and they can pursue their goal of Motherson -- together with Motherson building up a strong wiring harness company in India. So definitely, it will ease. But I don't think it becomes better or worse or something like that. It'll ease up, [ it does ease up ] .

The next question is from the line of Amyn Pirani from Yes Securities.

I joined a few minutes late, so pardon me if I am repeating a question. One of the motivations, as you mentioned for this -- for restructuring is that Sumitomo-san wanted, obviously, wanted to be a bigger part of the India wiring harness business. But when you mirror the shareholding, Sumitomo will continue to own 26-odd percent stake in the SMRPBV and other entities. So I just want to understand how that is solving that particular issue, the structure?

So basically, what will happen is that the domestic wiring harness business, as we said at the middle, split shareholding, it will continue to be this. But on the other side, once we are merging as part of this whole structure as it gets approved from the Board. In the instance of an approval, then the SMRPBV portion merges that 49%. So it doesn't remain.

Okay. So you're saying Sumitomo's stake will come down based on how the valuation is done for the 49% stake there?

Absolutely right.

But they will continue -- sorry.

Go ahead. Go ahead. Go ahead.

But they will continue to be -- at least as what we know today, they will continue to be a shareholder, maybe not 26% but at a lower rate going forward as well.

Yes. We have no indication that they have to sell or like that. That's clearly their decision how they would like to do it. But once we are not 26%, then they can hold their shares also. They can sell them also, it's up to them.

Understood, understood, understood. And obviously, obviously, it's a bit early for this question. But I mean, obviously, SMRPBV is not listed separately, and hence, the valuation, obviously, is a matter of opinion at this stage. So do you plan to list SMRPBV also, say, somewhere in Europe to derive valuation? Or you would do the transfer at a certain valuation based on certain expert opinions?

I think the expert opinion will come. But we have no plans to list any other company, Motherson -- at least the Motherson side of the family, we believe that 1 company where we -- all the holding will be there, would be the company, and we will keep it that way. We don't believe in multiple companies and all that.

The next question is from the line of Siddhar from Nomura Securities.

So first, some clarification on the domestic wiring harness business. So the exports which we do out of the stand-alone business will be -- will they be also part of the new entity? Or they will continue to remain a part of the existing entity?

All the details will be worked out. So there is a period of about 90 to 120 days in which all the nitty-gritties of the holding will be presented to the Board. So all the details we'll be able to share with you later. However, we don't also see tremendous amount of exports happening. The exporting rates was percentage of our wiring harness. Of course, we are exporting components and things like that, which should be on the other side.

Got it, sir. And secondly, on the acquisition philosophy now. So basically, earlier, we had maintained this structure as the polymers and mirror businesses are in a 51% increase. So now was any changes we have in the philosophy? For example, will this structure now help us to acquire other entities which are outside this polymer, wiring harness, rear mirror business? So anything on that line?

Absolutely. It will help us. But as I explained to Chirag also, it's not better or worse. We will continue our head-on-the-shoulder philosophy for acquisitions. Based on the bottom line as well. And if we can't see a 40% boost, we would not do that acquisition. So it doesn't make it easier. But what it does is it makes it a bit convenient because Sumitomo-san then is not involved in this particular part. So in that sense, yes, it will be a bit easier but it's not better or worse. So I mean, we are not absolutely sort of loose cannon for something that will go into the market and just take over whatever. So very, very clear. We maintain the same philosophy, same top line, bottom line focus. And yes, it would be a bit easier.

This is Kapil. I just had 1 question. In terms of acquisitions, we -- you tear off certain wiring harness related acquisitions. Where should we expect them in the future, in which entity?

Very good question. As in Sumitomo-san named clearly same domestic wiring harness. So you can be rest assured it's not going to be bad. But you are not putting any words in my mouth, and I'm not doing any -- the same. All I'm trying to say to you is hypothetically, yes, if that does happen, it will go probably to the other side, not to the wiring harness side -- not to Sumitomo-san's side.

The next question is from the line of Riken Gopani from Infina Finance.

I had 2 questions. First one, with the resultant entity where SAMIL will also [ up the ] stake. Will the proper -- promoter holding be in line with the listing requirements? Or will there be -- will that be higher? If you could just help us understand that.

Well, you should be ahead of the whole particular thing. We have to wait for all the valuations and everything to be done. But why would we break any law or anything that's not in the agreement not doing anything like that. And I think we are really conscious of the fact that we have always been very fair to all our investors. I mean, our 26-year history tell you, the amount we have paid back to the shareholders is legendary. So we are not going to destroy it with any single way. Whatever will happen, will happen. At the -- that is where we leave a lot of the things for the investors which are very [ loyal to us ].

Right, right, got it. And sir, a second question was with regards to the shareholder loans, which in recent past but even from the stand-alone entity. So would there be some change to that as well as a part of this transaction?

I mean, there will not be any change to that. I mean, if there are overseas -- again, it is a question of minor detail. So whatever loan you have there today are getting netted as risk. In case of MSSL, maybe SAMIL also, the similar treatment will happen. So depending upon the final structure, when it comes, you will have all the financial details on the same.

The next question is from the line of Sonal Gupta from Union Bank of India.

Sir, 2 questions from my side. One was on the -- I mean, the wiring harness -- I mean, historically, we've not been pursuing overseas the passenger vehicle wiring harness business because that conflicts with Sumitomo. So do you think this sort of separation will allow you to pursue that as well?

I think the fact that we look PKC and [ NWSI ], things are happening very, very good. I mean, you've seen the results. They've done an outstanding job. I think if there is such opportunities over there and we don't come into conflict, we will definitely look into it. But again, on the top line and bottom line expectations.

Sure, sir. And the other question I had was that, I mean, now that we are separating and assuming we are no longer constrained because of Sumitomo trying to maintain a certain level of shareholding, and retaining at certain businesses, then shouldn't you merge all the non -- I mean, like whatever is being done by operating businesses in SAMIL, which are related to auto components in this -- I mean, like -- I mean, what I'm asking is what is the rationale for continuing to have some businesses outside of being this entity now as a separate?

Great question. Yes, thank you for asking this question. The other businesses that we have are joint ventures, and it's very difficult to put all the joint ventures together in 1 company, and tell them all that, look, we're all one. That integration is very difficult to try to explain to the people. So all the joint ventures and others. So whatever is the business of SAMIL are joint ventures, that will stay different. At this particular moment, it's a bit too early to really tell you what will go where and this thing and all that. We'll wait for the experts to come will tell us which is the best way to separate that. But by and large, the joint venture will be out.

And Sonal, just to put the right words. I mean, we are not separating. I mean, we'll continue to have the same shareholding.

Right in his words. My words are okay.

Sonal, just to correct you. [indiscernible]

That's a better way.

We are not separating. I mean the shareholding of the domestic wiring harness company will remain unchanged.

Yes. And a lot of people are still thinking that we are going to sell out over there or something. That's nothing up there. We maintain our holding over there. Together, Sumitomo-san and Motherson will be running the domestic wiring harness company also very ably and very capably. We can be rest assured.

The next question is from the line of Jinesh Gandhi from Motilal Oswal

My question pertains to MSSL 2 where there'll be a [ double digit ] apart from India wiring harness. So would it be fair to assume that any future acquisitions now will be only done through MSSL 2?

Yes.

Would this be fair assumption?

Yes, you're right. Because the name of the other company itself is going to be domestic wiring harness. So there is really going to be very little chance, if any, for any acquisition to happen there. Unless some Indian company wants to sell, now that's a different matter. And we don't want to comment on that.

Sure. Sorry. My question is -- I mean, would SAMIL now be looking at any acquisitions or acquisitions at the group will be in the MSSL 2?

Yes. I think it will be in MSSL 2. SAMIL would be looking at joint ventures if they have to be set up in India or abroad. That would probably be looked at SAMIL. [ I think ] SAMIL will also become SAMIL 1 and SAMIL 2. So really, it's -- but by and large, what you're saying is right. All acquisitions will definitely happen in the publicly listed company. SAMIL would be more for the joint ventures.

Okay. So in future, JVs can happen in SAMIL but acquisitions will happen in MSSL 2.

Definitely. But JVs can also happen with the MSSL 2.

Obviously, obviously, goes without saying. And second question on the M&A front itself. So now MSSL 2, it's free to acquire, hypothetically, say any car wiring harness business outside India as well?

Hypothetically, yes.

Okay, okay, understood. And lastly, just throughout transaction as and when it happens where the share drop of MSSL 2 acquires 49% of SMRPBV from SAMIL, it will be through equity swap only, right? Or there'll be some cash component?

No, I'm not so lucky, so definitely will be cash. No cash.

The next question is from the line of Nishant Vass from ICICI Securities. The line for the current participant has been disconnected. We will move on to the next question. The next question is from the line of Pramod Kumar from Goldman Sachs.

And I think congrats on making -- taking the first step towards simplification of the structure, which has been a long-standing demand. My first question pertains to the M&A opportunities, sir, that while this entire process of -- what is it, demarcation of the business and all kind of gets done, which may take almost a year or so. What is the status on M&A which comes your way? Will you be still acting on them? Or will there be a bit of a deferment, so that the structure gets more simplified and everything happens in the right entity?

I think we are very actively looking at multiple options which are there. All I can tell you at this particular moment because we're in the quiet period. Please understand we have our Board meeting on the 10th of February. So all I can tell you is that there should be no deferment to any of the actions in the thing that we are looking at. If there need be, I think everybody -- because of the clarity of the structure now, it will become very, very easy to convince all of the stakeholders to go ahead with it.

Okay. And sir, by when will we be in a position to kind of put some color on the management split in terms of -- because the domestic wiring harness business is actually run by the Indian management side. So -- and SMRPBV will also demand a lot of attention once everything comes together and becomes a separately-listed entity. So by what time of -- by when in the process do you expect that there will be some bit of clarity as to how will -- which way the management -- top management of the current structure will kind of morph into in terms of to the 2 different companies.

So Pramod, we are actually taking a [ bigger bunker ] in Goa as well. So I think the bandwidth for management in Motherson is exemplary. We have a lot of bandwidth available there. And it's a bit too early to really start thinking or making any comments on this. I think the next 2 months, 3 months are very critical and valuable for us to really look at the whole scenario. Outside then of growth has been very, very good. They have made sure that there is a tremendous amount of people available in the group. And you look at the way PKC and [ NWSI ] as the -- even SMP, SMR. I mean, there's tremendous amount of the bandwidth in the group. So I'm not very concerned about it. But I think at the end of the day, we will come up with -- within the next 2, 3 months, once the people come up with what the complete [ technology ] looks like, what is launching, what is not launching. If that particular thing comes up, then we will dig in deep and picking all the talents that we have and bring them up in the front.

The next question is from the line of Pramod Amthe from CGS-CIMB. The line for the current participant has been disconnected, so we will move on to the next question. The next question is from the line of Raghunandhan from Emkay Global.

First question was on 3CX15 and 40% ROC targets, how will that shape up in the new format?

But we are just doing a readjustment of the company. We are not changing our targets or anything there. Absolutely 3CX15 will remain in focus for the next 2 months. And after that, for all you know, it might go to 3CX10 yet. We will tell you the news when -- that would still come out very soon. So I don't think I can guarantee the 3CX15 will remain. So it's the other one, 40% growth is that ingrained kind of a thing inside Motherson? All the businesses that we look at, they have the target -- ultimate target is to hit or go towards 40% growth or better. So we have no changes on that. All companies will just have to wait for another 3 months to see how there group does. But we are very confident that these are good standards to follow, and we will continue with them.

Then just 1 more query. On the investment data and that everyone knows that Motherson, the listed entity, has been extremely fair to the investors and shareholders. So when this acquisition of the remaining part of SMRPBV happens, would it be fair to assume that it would be a EPS accretive acquisition for the MSSL 2?

Definitely, we will leave that to the experts. And in one sense, the reason why we only thought that this would probably be a good way is because the value of 51% of SMRPBV is very clearly known. And when eventually, we will do the whole particular thing, you will see that we have been really, really generous and fair with the investors.

The next question is from the line of Jayesh Chandra Gupta from JM Financial.

This is Nitin Agarwala. Sir, if you could just help us with the current net consolidated net debt number, and how much of that you plan to shift to the new entity?

I think we are in the final period. So, let's focus on that concept. And the numbers for the MSSL consolidated will come on 10th February. And as far as bid structure is concerned, once the structure is there, appointed date is decided, then only we can discuss about the exact financials.

Okay. And if you could just tell us a broad time line on by when do we expect you or this transaction to get completed. And if the second transaction of Motherson is contingent on the first one?

I mean, it is going to be part of the same scheme. And 90 to 120 days is something which we think will do the period during which we will be able to do all the internal work, including the valuations or whatever formalities are required, we will work for that. And from that, that work will start more on a regulatory side once the Board clears that. In terms of filing in the [ service claim ], anything else to do those things.

But from our side, we are going to move on this very, very quickly so that all the disturbance that it causes to people and all that is reduced to the minimum. And definitely, from the management of Motherson Sumi, we would like to reassure that we would be very, very transparent and very open with the whole process. So no holds barred. We are absolutely ready to explain.

But that's the whole purpose of being transparent, to come out with this in-principle transaction. That this is what we are proceeding with other than saturating the market.

Yes. And rumor mills and all these things. So we want it to be out in the open so it is very clear.

Okay. And sir, lastly, if you could help us with the shareholding of SAMIL.

The annual report of SAMIL is in the public domain, but we will have to check on that. But 90%-plus is held by SAMIL family. 92% or something around that [indiscernible] 90%.

Yes. 6% is the Japanese, and the balance, 4%, is with the employees.

The next question is from the line of Pratik Sanghvi from Invesco.

Just 1 quick question. Who do you market to once it owns 100% of SMRPBV? Would it be logical for us to assume that the holding structure will collapse and it will actually become an operating company?

Absolutely.

Okay. Sorry. That's what we think. But again, it depends upon what advice we are given.

Sure, sure. Because if it remains a holding company, then there are different repercussions. But if it becomes an operating company, then we have different outcomes. I mean, in our minds, not in your mind, sir. In our minds for sure.

Okay. But as far as other things there, I think it is an operating company because it's operating a lot of the businesses also. So I don't know why you would call it a holding company. You're talking about MSSL 2, right?

Yes. Yes. MSSL 1 has always been an operating company.

Then MSSL 2 will also be operating company.

We have a good part of business in India as well.

Yes.

Well that's fair but if it just remains a...

Sir, sir, sir, let me explain to you. Make as a division, the manufacturing division will be a part of MSSL 2. And hence, it's an operating company. It's not a holding company, sir. But again a lot of things are going to happen, moving fast. So we are a bit cautious, that's all.

The next question is from the line Shyam Sundar Sriram from Sundaram Mutual Fund.

Wonderful move in terms of simplification of the structure, sir. Sir, my first question is on the order of this process itself. So firstly, we demerged the domestic wiring harness and listed separately with the mirror shareholding assets including the public holding that is currently there and MSSL will be there and domestic wiring harness as well. And then the separate entity will be created, which will acquire SAMIL's stake on SMRPBV?

So I'd love to answer this question because I've been asking this question as well. The thing is that the experts, when they become involved, they will tell us the right process, the lawyers will advise us the right sequence. So honestly, I'd love to answer this question, except I really don't know myself. But I'm sure that all these experts, now that we have the permission from the Board to appoint all these great guys to come in, then we will come to know more. And definitely, we'll keep sharing with you on time in the case.

Right, sir. Sir, just on a related question, we also have this Kyungshin Motherson with Hyundai JV wiring harness as well. All that will be part of the domestic wiring harness entity, sir?

No. It will go to the other side.

Oh, okay. And sir, sorry, what would be [indiscernible]

It's a joint venture. I told you, the joint venture will go to the other side. It's not a manufacturing operation in Motherson only. It's a joint venture.

Okay. Understood, sir, understood. Sir, just 1 more thing. Now that we are creating the separate global entity with the SMRPBV and which is free to acquire businesses outside the polymer and the mirrors, et cetera. If suppose a new acquisition opportunity opens up, how will you decide whether -- I mean, at the group level at the promoter SAMIL level, you'd acquire it or you'd want to put it at in the MSSL 2, the new entity.

Very good question. First of all, we will not decide where the acquisition will go. We will decide whether we can see a good top line, and we can see a good bottom line, then we will acquire the company. And the acquisition, if it's 100% acquisition, will definitely happen in MSSL 2. It won't go to SAMIL. SAMIL will be probably reserved for more joint ventures and et cetera.

Okay. Understood, sir. Understood. Sir, one more question, sir. In the domestic wiring harness business has been traditionally a very cash-rich company. And that could also be -- has provided some support to other businesses during times of need. Once it becomes a separate legal entity, that we will not be -- as a MSSL entity, will not be able to use that cash in case if it is required to support any other business, right, sir? In that sense, then the -- do you think the -- there'll be any implications on the leverage for the other businesses?

Tell me something. Since you know so much about what we think and what we do, what do you recommend there?

No, sir, I was just asking...

You seem to know everything [indiscernible] so please help me understand, we are also running the growth. We understand this is all implications on that. But first thing that you're thinking that we're only -- that company is making the money, I would say, revisit that thought process of yours. You can see how profitable and valuable SMR has become. It has a stand-alone growth of 43%. PKC has a stand-alone growth, and the MSSL stand-alone plus 60%. So just ask [ unique answers ] [indiscernible] MSSL 2 and the domestic level [indiscernible] So this is all things done. You are welcome to it, sir, you are welcome to it, and I'm very happy that you think like that. But I think you would give us credit that we have talked about all these particular things. And we are very clear that we can do and we will do better and better. I can assure you.

34 That was very helpful, sir. Sir, and tax implications, will there be any tax implications for the selling entity when we demerge these businesses?

So these are demergers. I don't think there is any tax implication. But if somebody sells their shares, then he definitely will make a lot of money. And for that, he has to bear the tax.

The next question is from the line of Basudeb Banerjee from AMBIT Capital.

A couple of questions. One, with respect to the continuation of previous questions itself. So what you said are very much right but it all depends upon turnaround of SMP. So that one cannot comment that [indiscernible].

Sorry, sir, why did you use the word turnaround for SMP?

Margins are flat [indiscernible]

[indiscernible] are up.

Going back to your [indiscernible]

[indiscernible] I'm just correcting your first question. A lot of the plans of SMP are doing phenomenally well. It is absolutely self-reliant. It doesn't mean anybody's help, is doing very well. And all these things are -- this is a process. When you have a greenfield of that size magnitude, you will have these situations. Thus solving that, so you can't take a sort of slice of time and then say, this is what turnaround will require. There's no turnaround. It's still ramping up. Still ramping up [indiscernible] Another on the ramp-up and what difference is there.

So as a process of this ramping up, one can see the minority interest reported as falling from the 650-odd crores to almost sub-300 crore levels. So if one looks at the valuation for the residual stake, the minority in test number can be a good indicator. So just a ballpark, understanding that either the valuation will be based on near-term subdued numbers because of the ramp-up of SMP? Or it should be based on a normalized SMP ramped up situation of mix.

So definitely, what the current situation is, the valuation is going to be of that. And we have the experts and all of it is going to be out in the open, absolutely, so everybody knows what is the valuation. You'll all know. And you guys normally can second guess you guys. So it's all right, we are just absolutely open. What is the current situation, the valuation will be based on that. And we are very confident that the valuation and all that will be weighted in your particular realm of thinking.

Surely, sir. Then the minority shareholders definitely will benefit from the SMP ramp-up as the [product valuation]?

[indiscernible] 26-year history, sir, of taking care of the minority shareholders, sir.

The next question is from the line of Priya Ranjan from Antique Stockbroking.

My question is on MSSL and MSSL 2. I mean because of Sumitomo was holding some stake here. So Sumitomo will continue to hold some stakes? So how will we give them the exit?

[indiscernible] it's a publicly listed company, sir. And that question is vested business to Sumitomo-san. I can't answer this question, sir. But I personally think that if Sumitomo-san feels there is value, they will hold onto it. And if they want to get out, it's a public -- they can withdraw any time. They can sell out to me. They can do whatever they want, sir. I can't give more than that, sir.

Because I mean the rationale for them was this business has to be separate. I mean, they don't want to probably [indiscernible]

Sir, they didn't say that. They said that we want to be in core because in core, wiring harness is a very serious business. It's a long-term business. People can have imagination or whatever. Sumitomo-san make components, the wires, they make that technology to a wire harness and it's very serious technology. So they just want to be into that core area, which is very fair. We don't -- we're really thankful that they supported us who are Motherson Sumi for the materials and price that we have had. And they are still shareholders on the other side, but they don't want to maintain 35% holding there because it will come down, with the SMRPBV coming in it will come down. So it's up to them. If they want, they can keep their shares. They don't want, they can sell off to us. They can sell that to the market. I don't know. It's up to them. I can't answer that question.

The next question is from the line of Pratit Vajani from ICICI Securities.

This is Nishant. Sir, just wanted -- congratulations, really congratulations. So I just wanted to get a sense about the backdrop in terms of -- because this has been a long-standing request, and you've seen Sumitomo-san not getting comfortable with it. So can you give some background as to how finally this happened in terms of what were the discussions. Something on that side from this is very helpful.

Thank you, Nishant, for asking this question because I don't know if people think that it was just an overnight decision and we just woke up in the morning, and we said, let's do it. But it is important for people to understand that in January 2012, there was a subcommittee which was formed in the Board of Directors meeting of Motherson for restructuring. Because time and again, we were getting a lot of requests for simplification of the group. But we have many moving parts. At one particular time somewhere around 2016, we had almost come to an agreement that we were going to split the company and come up with a very good scheme. But then the budget came and the loss hedged. And there would have been a massive tax implication on people who would have taken over, bought their shares in the past 2 years or 3 years, there would have been a huge tax implication. And the problem team that who is going to bear the tax for that. And of course, we felt that it was unfair is the individual was going to pay that. So we dropped that idea. We have been working on this incessantly for a long time now. From my count it's 8 years. And really the management's timing, everything gets absorbed in this particular thing. When -- in the last 3, 4 months, when committee came out that we simplified the whole particular thing. We don't complicate it. We don't move -- a lot of moving parts or things like that. We came to a very simple agreement with Sumitomo-san that okay, we bring up the domestic wiring harness business in India, we keep it separate. All other businesses moves to MSSL 2. And in the process, we could also then get a long-term demand from the shareholders, which was that can we not have this 51%, 49% thing because people are unsure as to what is going to happen for acquisitions and all that. So we addressed that particular thing also. And we said, we will only demerge SMRPBV because that value is already discovered. The value is very reflected in the value for Motherson Sumi Systems' shares. And hence, only that particular thing was taken out. All joint ventures are kept separately so that this whole complication of doing valuations and people having objections to this and that, all that would be reduced to absolutely zero. And we leave enough for all the investors because look at the history of Motherson. If you had invested INR [ 25,000 ] in '93 with Madison, today, the value is INR 5.5 crores of that particular thing. This is coming from some TV, it's not coming from me. So all I'm trying to explain is we have always given tremendous amount of value to our investors. And we thought in such a scenario, how do we do it in a manner that Sumitomo-san is comfortable, the shareholders are comfortable, the employees of the group are comfortable. So in that process, we are very grateful to Sumitomo-san for understanding this particular situation also. Very grateful to the employees also that they understand that this particular thing, we have to bite the bullet and make it more simple for the investors. So on that basis, there was a long process of talking with people, talking with lawyers, talking with investment bankers. And we will bring [ the delivery ] because we would see that people are just having a rumor mill kind of a thing happening over there. So we said no, let's bring it out in the open, safety approval from the Board, so that there are no people having mistrust or misunderstanding what Motherson is trying to do. We will bring it out in the open. Everybody does. So that's the whole process of how we came to that. Finally, yesterday, we could [indiscernible] with the Board, and the Board also said that is a very fair way to look at it. Report it. In 2 months' time, we will get a report from these guys. Based on that report, we then present it to the Board. The Board approves it. And if they agree, then we will go ahead. If the Board feels -- and we have 5 independent directors, [indiscernible] the directors. If all of them are happy with this particular thing, we'll go ahead. If not, we'll drop it, we won't do it. So I think people are saying that it will happen. I'm just saying that there is a possibility, maybe a remote one, but there is a possibility that we will not do it also.

The next question is from the line of Pramod Amthe from CGS-CIMB. There is no response from the line for the current participant. [Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Vivek Chaand Sehgal for closing comments.

Thank you very much. I think in the mind of the whole Board and the employees of Motherson Sumi, this is a very important development for our company. We want to be absolutely fair to all the stakeholders of Motherson Sumi, and our history will tell you that we will maintain what we are saying. We are grateful for all of you to attend this particular conference on short notice. And thank you all.

Thank you.

Thank you.

Thank you. On behalf of Motherson Sumi Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.