Motherson Sumi Systems Limited: Rewiring the Ownership Structure

The case opens with a recent proposal from Motherson Sumi Systems Limited to simplify the ownership structure of the group which had become complex over the years as a result of global acquisitions, among other reasons. To set the context and enable a discussion on the potential concerns with the existing group structure and the impact of the proposed restructuring, the case is divided into three sections that trace the evolution of MSSL from a small firm that got an unexpected opportunity to become a wiring harness manufacturer and progressed to a global tier-1 auto-component company with presence in 41 countries and over 135,000 employees. The first section provides the early history of the firm and its strategy that enabled it to take advantage of opportunities provided by liberalization of India’s economy in the 1990s. It also provides insight into the management style of the founder, who opted to relinquish his formal executive role and take up the role as chairman. The second section provides an account of MSSL’s 5-year visions, MSSL’s acquisition led growth strategy that enabled it to become a global company, and the role played by the group holding company, which was controlled by the founder family, in making acquisitions and pursuing diversified business opportunities. The third section elaborates on the proposed restructuring scheme that is intended to address investor concerns about the existing group structure and the potential conflicts. Finally, this section also provides details about the latest 5-year vision plan announced immediately after the announcement of the group restructuring scheme.