Mumbai: Auto-component maker Varroc Engineering Ltd’s ₹ 1,955 crore initial public offering (IPO) was fully subscribed on Wednesday, the second day of the share sale, according to data from stock exchanges.
The initial share sale closes on Thursday, 28 June. On Tuesday, the IPO saw a subscription of 33%.
As of 5pm on Wednesday, the portion of the share sale reserved for institutional investors was subscribed 3.17 times, while those reserved for retail investors and high net-worth individuals (HNIs) were subscribed 22% and 4% respectively.
Varroc Engineering, backed by Tata Opportunities Fund, has fixed a price band of ₹ 965-967 per share.
The Varroc Engineering IPO is a pure sale of shares by the promoter and investors. The company does not intend to raise any fresh capital for investing in its business.
At the upper end of the price band, the selling shareholders will fetch ₹ 1,955.4 crore, with the promoter, Tarang Jain, fetching ₹ 169.4 crore. Jain holds a 46.35% stake in the company.
Tata Opportunities Fund will make a complete exit from Varroc Engineering. It owns a 12.55% stake in the company and stands to make ₹ 1,635.8 crore from the IPO. The fund had invested ₹ 300 crore in 2014.
Another Tata entity, Tata Capital Financial Services Ltd, will also sell its entire 1.15% stake in the company. Tata Opportunities Fund’s exit from Varroc will be among the largest IPO exits by any private equity firm in India.
Investment banks Kotak Mahindra Capital Co Ltd, Citigroup Global Markets India Pvt Ltd, Credit Suisse Securities (India) Pvt. Ltd and IIFL Holdings Ltd are managing the Varroc share sale.
Varroc designs, manufactures and supplies exterior lighting systems, plastic and polymer components, electricals-electronics components, and precision metallic components to passenger car, commercial vehicle, two-wheeler, three-wheeler and off highway vehicle manufacturers worldwide.
Between FY16 and FY18, Varroc’s revenue grew at a compound annual growth rate of 12.37%.