Varroc’s two more plants are coming up in Brazil and Morocco each at a total cost of 63 million euros (about Rs 504 crore). And another one is being set up at Halol, Gujarat at a cost of Rs 35-40 crore where the company would serve the lighting needs of Hero Motocorp from September onwards.
Tarang Jain, managing director, Varroc Group said: “We have signed a binding agreement in Turkey. It’s a 42-million euro acquisition. Good part about this acquisition is that our OEMs also want us to be in Turkey. So going to 100-million euro turnover wont be a problem. There will be further investment in Turkey also.”
“We are putting up two more plants, in Brazil and Morocco to support VW and Renault-Nissan. In return, they will support us in US and European markets. Morocco, where we would invest 33 million euros and in Brazil we would do 30 million euros, put together would generate 100-million euro revenue in 3-4 years. Investment will be made over three years,” added Jain.
There are presently 36 facilities of the company globally, including 26 in India. With the addition of four more, the total count would rise to 40 in the coming months. About 65 percent of the company’s revenues comes from outside the country.
In addition, Varroc is getting into its 17th product in the two-wheeler parts space. In the light of implementation on Bharat Stage VI emission norms the company is getting into manufacturing of electronic fuel injection systems.
“We are getting into electronic fuel injection system, which will be our 17th product with a partnership with an Italian company. We will make catalytic converters to comply with emission norms too”, added Jain.
Varroc Engienering is coming out with an initial public offering (IPO) which opens next week. The company will be raising Rs 1,955 crore and has set a price band of Rs 965-967. Its issue opens on June 26.
The primary objective is to allow its private equity investor Omega TC Holdings Pte and Tata Capital Financial Services who hold 13.7 percent stake, to exit the company. Tarang Jain would be diluting 1.3 percent of his own stake in the company.
Tata Opportunities Fund entered the company in March 2014 with an investment of Rs 300 crore, said Jain. The promoter stake will remain at 85 percent after the IPO.