Tata Opportunities Fund-backed Varroc Engineering Ltd and human resources firm Genius Consultants Ltd have received regulatory nod to float initial public offerings (IPO).
The Securities and Exchange Board of India (SEBI) issued final observations to Genius Consultants and Varroc Engineering on 4 June and 6 June, respectively. This takes the total number of companies to have received regulatory nod for IPOs in 2018 to 22.
As many as 46 firms had received clearance for IPOs in 2017, according to SEBI’s website.
The public issue comprises a sale of 18.53 million shares. It will result in 13.75% stake dilution on the post-issue basis. Singapore-based Omega TC Holdings Pte Ltd, a fund managed by Tata Opportunities, and Tata Capital Finance Services will sell bulk of their holding in the IPO.
Omega will sell 15.37 million shares out of the 16.91 million it holds. Tata Capital Finance will sell 1.41 million shares out of the 1.55 million shares it owns. Promoter Tarang Jain is selling a small chunk of shares.
The IPO size is estimated at Rs 2,500-3,000 crore. The company will not receive any proceeds from the offer, and the money will go to the promoter and existing private equity shareholders.
Kotak Mahindra Capital Co, Citigroup Global Markets India, Credit Suisse Securities (India) and IIFL Holdings are the merchant bankers managing Varroc Engineering’s IPO.
Varroc Engineering was incorporated in May 1988 and commenced operations of its polymer business two years later. The company diversified into India’s second-largest auto component group by revenue.
It is the sixth-largest global exterior automotive lighting manufacturer and one of the top three independent exterior lighting players.
The company designs, manufactures and supplies exterior lighting systems, plastic and polymer components, electrical-electronic components, and precision metallic components to passenger car, commercial vehicle, two-wheeler, three-wheeler and off-highway vehicle manufacturers directly worldwide.
The company attributes its growth to various investments, joint ventures and acquisitions in the past decade. Most notably, it acquired NYSE-listed Visteon’s global lighting business in 2012.
Prior to the Visteon acquisition, the company had bought I.M.E.S (a manufacturer of hot steel forged parts for the construction and oil and gas industries) in Italy in 2007. It also acquired Triom (a manufacturer of high-end lighting systems for global motorcycle makers) with operations in Italy, Romania and Vietnam in 2011.
Through its Visteon acquisition, the company acquired the firm’s 50:50 joint venture with Beste Motor Co. Ltd in 2013 to manufacture automotive lighting in China.
Varroc counts several top global automotive companies as its key clients. These include Ford, Jaguar Land Rover, Volkswagen Group, Renault-Nissan-Mitsubishi and Groupe PSA. In India, the company has long-standing business relationship with Bajaj Auto Ltd.
Genius had filed its draft prospectus on 29 March.
The issue comprises a fresh issue of shares worth Rs 170 crore and a sale of one million shares by promoter Rajendra Prasad Yadav, who is also chairman and managing director.
With this, the Kolkata-based firm will join listed peers Gaja Capital-backed TeamLease Services Ltd, Fairfax-backed Quess Corp Ltd, and CX Partners-backed Security Intelligence Services Ltd, which went public in the last two years.
Genius aims to use the proceeds towards working capital requirements, besides upgrading its information technology infrastructure, and setting up branch offices. The company has set aside Rs 30 crore for strategic acquisitions and similar initiatives.
SBI Capital Markets and Yes Securities (India) are the merchant bankers managing the IPO.
Genius, incorporated in 1993, started operations as a provider of staffing solutions and diversified into other human resources solutions. Now, the company plans to venture into security services and human resources business process outsourcing.
Genius operates through 15 branch offices and area offices across 14 states, covering over 950 locations across the country. It caters to over 800 clients through over 1,100 contracts.
Its clients operate in sectors such as telecommunications, information technology, logistics, infrastructure, engineering, fast-moving consumer goods, retail, pharmaceuticals, and others. Key clients include Bharti Airtel, Bosch, Hathway Cable and Datacom, Tata Consultancy Services and Paytm.