Varroc Engineering Eyes Growth From Electric Vehicles
Varroc Engineering’s IPO, a pure offer for sale, opens between June 26-28 at a price band of Rs 965-Rs 967 apiece.
Auto parts supplier Varroc Engineering Ltd. is focusing on electric-vehicle technology as well as the Bharat Stage-VI emission control norms, which will come into force in a couple of years.
The Aurangabad-based company will invest in electric bikes and power-trains, in addition to technologies on emission reduction and light-weighting to achieve higher than market growth. It also has plans to develop catalytic converter technology in line with BS-VI standards.
“This strategy will give us 300 percent content growth in the two-wheeler segment and boost sales,” said Varroc’s Managing Director Tarang Jain. Content growth refers to commanding greater premium for automobile parts by upgrading technology.
We are entering the electronic fuel injection control systems market which is significant for two-wheelers and is mandatory from 2020. In India, we are well positioned for good growth and going forward we will have a role in the electric bike segment.Tarang Jain, Managing Director, Varroc Engineering
The company has inked a joint venture with Italian electronic injection system manufacturer Dell’Orto, S.p.A for the production, marketing and sale of electronic fuel injection control systems.
Varroc is also evaluating opportunities for mergers and acquisitions to expand in the domestic electric-vehicle and lighting segments. “We’re on the lookout for smaller companies that want to be acquired.”
IPO Plans
The company said its Rs 1,955-crore initial public offering will hit the primary markets between June 26-28 at price band of Rs 965-967. Singapore-based Omega TC Holdings Pte Ltd. and Tata Capital Financial Services Ltd., which hold 13.74 percent and 1.26 percent stake in the business respectively, will exit via the IPO. Promoter Tarang Jain will offload 17 lakh shares through the public issue.
Global co-coordinators and book runners for the IPO are Kotak Mahindra Capital, Citigroup Global Markets India and Credit Suisse Securities (India).