Varroc Engineering IPO: Worth to subscribe?

Varroc Engineering IPO


As on 25 June 2018:  60

As on 27 June 2018: 45/50

As on 28 June 2018: 26

As on 04 July 2018 : 50/52

As on 05 July 2018: 45/47

Kostak: 600

Subject to : NIL

Subscription Day 3:

Shares Offered 4024,346 3018260 704,2606 14185,212
Number of times Subscribed 4.9551  0.2415 0.6449 1.7792



Varroc Engineering Limited is incorporated in 1998 which is OEMs (Original Equipment Manufacturers.)

Varroc Engineering is a Tier-1  (Tier-1 company is the one which directly supplies to original equipment manufacturers.) automotive component group which designs, manufactures and supplies exterior lighting systems, polymer components plastic and electrical-electronic components, commercial vehicles, two-wheelers, three-wheelers, and precision metallic components to passenger cars and off highway vehicles.

Varroc has a global footprint of 36 manufacturing facilities. Mostly manufacturing facilities are spread across seven countries, with six facilities for its Global Lighting business, 25 for India business and five for other businesses.
In short, it is spread across seven countries.

It is also the sixth-largest global exterior automotive lighting manufacturer.

Varroc has end-to-end capabilities across design, R&D, testing, engineering, manufacturing and supply of various products.

It owns two primary business lines:

(1) The manufacturing, design, and supply of exterior lighting systems to passenger cars OEMs worldwide, company undertakes through its subsidiaries forming part of the VLS group

(2) The manufacturing, design, and supply of different types of auto components in India basically to two-wheeler and three-wheeler OEMs, exports are also included inside it.


The company’s Global Lighting Business mostly focuses on the design, manufacture, and supply of exterior lighting for passenger vehicles.

As per market share in 2016, it is the sixth-largest tier-1 automotive exterior lighting manufacturer globally and one of the top three independent exterior lighting players.

  1. Low cost, strategically located manufacturing and design footprint;
  2. It has a standard portfolio of products in the markets, this portfolio allows it to be a just- dial for the clients and to cross-sell products.
  3. Robust in-house technology, innovation and R&D capabilities;
  4. Company has strong and long-term relationships with many of its clients.

It has a relationship with a large British car manufacturer in the Global Lighting Business since 2006.

It has a long-standing relationship with Bajaj in the Indian Business since 1990,

  1. Consistent track record of growth and operational and financial efficiency


 (1) It is mostly depends on the performance of the global passenger vehicle market and the two wheeler and three wheeler markets in India. Changes in these markets can impact the business, results of operations and financial condition, adverse condition too.

(2) It is subject to environmental and safety regulations, so this subjectivity may adversely affect business and the company have been subject to environmental notices in respect of certain of their manufacturing facilities and in the future it may be subject to further notices.

(3) RBI has put Varroc Engineering on the caution list as there were 174 incidents of mismatch between export data and export realization data.

(4) Company will not get any proceed from the IPO but seller share holder will get proceeds of the IPO.


Tarang Jain is the promoter of the Company. He holds following shares of Company:

  1. Tarang Jain: 50,798,590 (41.26%) Equity Shares
  2. Tarang Jain: 11,683,770 (100.00%) Series C CCPS


Issue Open: Jun 26, 2018 – Jun 28, 2018
Face Value: Rs 1 per Equity Share
Issue Price: Rs 965 – Rs 967 per Equity Share
Market Lot: 15 Shares

Issue Type: Book Built Issue IPO
Issue Size: 20,121,730 Equity Shares of Rs 1 aggregating up to Rs 1,945.77 Cr
Minimum Order Quantity: 15 Shares 

Minimum investment: Rs 14,505 on higher price band

Leading Managers: Credit Suisse Securities, IIFL Holdings, Kotak Mahindra Capital, Citigroup Global Markets,

Listing At: BSE, NSE

 IPO Valuation

On FY 2018

EPS: Rs 33.4

Upper price band: Rs 967

P/E works out to be 28.9x.

On the last 3 years

Average EPS: Rs 32.35

P/E works out to be 29.9x

Some IPO has been listed at P/E 41x to 45x. Hence, Varroc Engineering IPO is fully priced because its P/E is between 29x to 30x.

Varroc Engineering IPO is good for long term investment for 4-6 year if you are a high risk investor. This IPO is not recommended for very short term investment. Dream of profit within first week of listing is very risky for this IPO.

 Company Contact Information:

Varroc Engineering Limited
L-4, MIDC Area
Aurangabad 431 136
Phone: +91 240 6653 700/6653 699
Fax: +91 240 2564 540

Varroc Engineering IPO Registrar:

Link Intime India Private Ltd
Link Intime India Private Ltd,
C-13 Pannalal Silk Mills Compound,
LBS Marg, Bhandup West, Mumbai 400078
Phone: +91-22-25963838
Fax: +91-22-25946969
Email: [email protected]

Anchor Investors Detail



Allotment Link:

Varroc Engineering IPO Timelines / Tentative Dates:

  • Bid/Offer Opens On: Jun 26, 2018
  • Bid/Offer Closes On: Jun 28, 2018
  • Finalisation of Basis of Allotment: On or about Jul 3, 2018
  • Initiation of refunds: On or about Jul 4, 2018
  • Credit of Equity Shares to demat accounts: On or about Jul 5, 2018
  • Commencement of trading of the Equity Shares on the Stock Exchanges: On or about Jul 6, 2018


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