Tata completes first exit from Opportunities Fund

Varroc sold 20.2 million shares earlier this month, including the 18.5 million shares held by Tata, at INR967 each, aggregating INR19.6 billion ($285 million) overall and INR17.8 billion for Tata. The company showed strong performance in its first few days on the market, opening at INR1,037.65 on July 6. The price has dropped since then, closing at INR964.65 on July 20.

When Varroc initially filed for its IPO in April Tata intended to retain a partial stake in the company. Apart from the GP increasing the size of its stake sale, the other terms of the offering remained unchanged. Varroc issued no new shares and the only other shareholder to exit was promoter Tarang Jain.

Tata invested INR3 billion in Varroc in 2014 to support its acquisition of the international auto lighting systems business from US-based Visteon. The company 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. 

Varroc’s revenue came to INR97 billion for the year ended March 2017, up from INR82 billion the year before. Over the same period, net profit fell from INR3.7 billion to INR3 billion.

Tata Opportunities was set up to invest both in other Tata Group entities and in independent Indian businesses. Varroc was its first investment outside the Tata Group; the exit leaves seven companies in its portfolio, including third-party logistics service provider TVS Logistics, budget hotel operator Ginger Hotels, and residential property developer Shriram Properties.

The GP is currently targeting $600 million for a successor vehicle.

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• Topics
• South Asia
• IPO
• Industrials
• India
• Tata Capital
• manufacturing
• Exit
• automobiles