Auto component firm Varroc Engineering may file IPO papers by March end

One of India's leading two-wheeler auto component makers and one of the largest global manufacturers of lighting systems, Aurangabad based Varroc Engineering backed by Tata Opportunities Fund is in the advanced stages of launching its IPO ( initial public offering) and may file its DRHP ( draft red herring prospectus) with market regulator Sebi later this month, multiple sources familiar with the company's plans told ET NOW on the condition of anonymity.

Auto industry veteran Rahul Bajaj's nephew Tarang Jain is the Managing Director of Varroc Engineering which clocked sales of $1.5 bn in 2016-2017 and counts companies ranging from Tesla and Jauguar Land Rover to Royal Enfield and Yamaha as its customers.

" Varroc Engineering is planning to file the DRHP for its proposed IPO in March. The company is looking to raise around Rs 3000 crores via a secondary issue of shares," said one of the sources cited above.

" Tata Opportunities Fund is eyeing a complete exit as part of the proposed IPO of Varroc Engineering and that is the main driver," added a second source. Kotak Mahindra Capital, Citi and Credit Suisse are advisors to the IPO, sources added.

Tata Opportunities Fund picked up approximately 13.7% stake in Varroc Engineering in 2014 for Rs 300 crores.

Varroc Engineering has 35 manufacturing facilities and is present in 10 countries across 3 continents, according to the company website. Founded in 1990, the company supplies exterior lighting systems, power trains, electrical and electronic parts, and body and chassis parts to both domestic and global players.

In response to an ET NOW email query, TR Srinivasan, Group CFO, Varroc Group said, " As a matter of company policy, we do not comment on market speculations and hence regret we are not able to provide a response to your query." Citi declined to comment and ET NOW is awaiting responses from Tata Opportunities Fund, Credit Suisse and Kotak Mahindra Capital.