Tata-backed Varroc files for India IPO
Varroc Engineering, an Indian auto component manufacturer owned by the Varroc Group, has filed for an IPO that will see its private equity backer Tata Capital exit the bulk of its holding.
According to the prospectus, the offering will comprise 18.5 million shares held by existing investors, including 16.8 million shares from Tata. No new shares will be issued in the IPO, and pricing for the shares has not been announced. Tata currently holds 18.5 million shares in Varroc Engineering, a 15% stake. The sale will leave it with 1.7 million shares.
Varroc Engineering supplies exterior lighting systems, plastic and polymer components, electronic and electrical equipment, and precision metallic parts to a range of automobile and motorcycle manufacturers worldwide. In the domestic market it focuses on the two and three-wheeler segment, while its overseas customers also include manufacturers of passenger cars, commercial vehicles, and off-highway vehicles. In the year ended March 2017, Europe accounted for 36.6% of its revenue, compared to 32.7% from India and 20.4% from the US.
Upon its founding in 1990, Varroc Engineering focused solely on polymer components. Its metallic and electrical divisions were built up internally, while lighting capabilities were added through several acquisitions, most notably that of the global lighting business of Visteon, formerly a division of Ford, in 2012.
The company has 36 manufacturing facilities across seven countries – including 25 in India – and serves global marquee car makers including Ford, Jaguar, Land Rover, Volkswagen, Renault-Nissan-Mitsubishi, and Groupe PSA. For the year ended March 2017, revenue came to INR97 billion ($1.5 billion), up from INR82 billion the year before. Over the same period, net profit fell from INR3.7 billion to INR3 billion.
Tata invested in Varroc Engineering in 2014, committing INR3 billion through the Tata Opportunities Fund, which was set up to invest both within the Tata group of companies and in other independent Indian businesses. The firm is targeting $600 million for a successor vehicle, which will make growth capital and buyout investments in the range of $30-200 million, mobilizing co-investments for larger transactions.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.