Auto components major Sona Comstar on Thursday said that it is currently in discussions with many potential customers both in India and abroad, “in the ordinary course”, for the growth of its business. The Gurugram-based company’s shares started spiking after a CNBC-TV18 report claimed, citing sources familiar with the matter, that Sona Comstar is in advanced talks to supply components for electric vehicles to Chinese EV-maker BYD.

“At this stage, there is no material event or information that requires disclosure,” Sona Comstar said in an exchange filing, after the exchange sought clarification on the report published by CNBC-TV18. After the report was published, shares of Sona Comstar spiked 7%. The shares closed 6.8% higher on Thursday.

According to the report, talks between Sona Comstar and BYD have been going on for the past few months. The sources revealed that in the event a deal is finalised with BYD, Sona Comstar could also establish a localised component manufacturing facility in China. The facility is part of a long-term roadmap for continued collaboration with BYD, the report added.

In the fourth quarter of last year, 35% of Sona Comstar’s revenue came from the electric vehicles vertical. It is also known that one of the company’s customers is Tesla. However, the company has never formally acknowledged or talked about the precise nature of its relationship with the Elon Musk-led company.

Sona Comstar, which is the biggest importer of rare earth magnets in India, is also mulling local production of rare earth magnets amid the government’s push to incentivise production of rare earth magnets amid the ongoing clampdown on exports of rare earth magnets from China, which produces 90% of the rare earth magnets made in the world. The company, which also supplied differential gears and motors to Stellantis, imported 120 metric tons of magnets from China last year.

Vivek Vikram Singh, the CEO of the company, told Reuters in an interview that the company will look into the incentives provided by the Indian government once they are finalised, to evaluate its investment in local manufacturing of rare earth magnets. Singh also said that the company has the financial wherewithal to locally manufacture the magnets, citing its five-fold increase in revenue over the last five years.