Shares of Sterling Tools Ltd rose sharply in Thursday's trade amid heavy volumes. The stock surged 11.18 per cent to hit a day high of Rs 374.40. Today's sharp rise in the share price came after the small-cap auto component firm said it has entered into a memorandum of understanding (MoU) with South Korea's Yongin Electronics.
"Sterling Tools, the second-largest automotive fastener manufacturer and, through its subsidiary, the leading manufacturer of Motor Control Units (MCUs) in India, has signed an MoU with South Korea's, Yongin Electronics Co Ltd, a major supplier of components to the Hyundai Kia Motor Group," the company stated in an exchange filing.
This strategic agreement, expected to generate Rs 250 crore in business over the next 5 years, marks a crucial step in advancing the production of electric vehicle (EV) and electronic components within India, it added.
The association strengthens Sterling's EV component portfolio by increasing local value addition and backward integration into passive components, in line with the 'Atma Nirbhar Bharat' vision of the government, the filing further read.
Anish Agarwal, Director at Sterling Tools, said, "This MoU demonstrates Sterling's commitment to developing the EV and Electronics ecosystem and contributing to 'Make In India'. We are one step closer to our goal of strengthening our presence and offerings as a provider of green energy solutions in the automotive industry."
Yongin is the manufacturer for electronic components such as transformers, AC/DC reactor, coil & choke, EMI filter board, DC link EMI filter, high current DC connector and metal ferrite cores.
KH Kim, CEO at Yongin Electronics said, "We recognize the significant potential within the Indian EV market. It brings us great pleasure to announce our partnership with Sterling through the signing of an MoU. We are prepared to embark on a journey of mutual growth and collaboration within the Indian EV industry, contributing positively to its advancement.”
As the automotive landscape continues to evolve, Sterling said the signing of this MoU positions the group to spearhead the transition towards a sustainable and technologically advanced future.