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Last Updated : Jun 27, 2018 06:28 PM IST | Source: PTI

Varroc Engineering IPO fully subscribed on Day 2; Tata Group may garner up to Rs 1,786 cr

Two Tata Group entities which are offloading 13.7 per cent stake, or 1.84 crore shares, of the company would garner up to Rs 1,786 crore through the public issue.

The Rs 1,955-crore initial public offering of auto component maker Varroc Engineering was fully subscribed on the second day today due to strong interest from institutional investors.

Two Tata Group entities which are offloading 13.7 per cent stake, or 1.84 crore shares, of the company would garner up to Rs 1,786 crore through the public issue.

The IPO received bids for 1,44,79,575 shares against the total issue size of 1,41,85,212 stocks, translating into a subscription of 1.02 times till 1700 hours, data available with the NSE showed.

The portion set aside for qualified institutional buyers (QIBs) was subscribed over three times, non-institutional investors witnessed a subscription of two per cent, while that of retail investors was 18 per cent, merchant banking sources said.

Varroc Engineering supplies auto parts to Jaguar Land Rover, Bentley, Audi and Harley Davidson. Besides, it supplies auto parts to giants such as Volkswagen, Ford, Honda and Bajaj Auto.

The initial public offer (IPO), for which the company has set a price band of Rs 965-967 per share, consists of an offer-for-sale to the tune of 2,02,21,730 equity shares by promoter Tarang Jain and existing investors.

While the promoter will sell up to 17,52,560 shares, Tata Group entities -- Tata Capital Financial Services and Omega TC Holdings -- will offload a total of 1.84 crore shares amounting to 13.7 per cent stake.

Omega TC will offload up to 1,69,17,130 equity stocks (amounting to 12.55 per cent stake) and Tata Capital will divest up to 15,52,040 scrips or 1.15 per cent holding. Tata Group will garner Rs 1,786 crore through the public issue.

Varroc's IPO opened on June 26 and will close on June 28. At the upper end of the price band, the public issue will fetch Rs 1,955 crore.

A day ahead of the IPO, the company raised Rs 583.7 crore from anchor investors.

The company's IPO committee has finalised allocation of over 60.36 lakh shares to 30 anchor investors at a price of Rs 967 apiece.

Canadian pension fund CDPQ, Smallcap World Fund Inc Nomura Fund Ireland Public Ltd, DSP BlackRock, ICICI Prudential Mutual Fund and SBI Mutual Fund are among the other anchor investors.

Founded in 1990 in Aurangabad, Varroc is an automotive component manufacturer and supplier of exterior lighting systems, power-trains, electrical and electronics, body and chassis parts to passenger cars and motorcycle segments worldwide.

Kotak Mahindra Capital, Citigroup Global Markets India, Credit Suisse Securities India and IIFL Holdings are managing the issue.
First Published on Jun 27, 2018 06:21 pm
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