Varroc Engineering Limited is directly engaged in supplying original equipment manufacturers, refers to a tier-1 automotive component group. It is Aurangabad based company, was incorporated in the year 1988. The company attached in manufactures designs and supplies exterior lighting system, polymer components, plastic, electrical-electronics components. It also supplies precision metallic components to the commercial vehicle, along with passenger car there are two and three wheeler and off-highway vehicle too.
Today’s topic is based on the Varroc Engineering IPO review but step into the main discussion let’s start with the company’s IPO details.
About Varroc Engineering Ltd-Issue Details
- Issue open on- Jun 26, 2018
- The issue close on- Jun 28, 2018
- Issue type: Book Built Issue IPO
- Face value: Rs 1 Per Equity Share
- Issue size: 20,121,730, Equity Shares of Rs 1 that aggregating up to Rs. 1,945.77 Cr
- Issue price: Rs 965- Rs 967 Per Equity share
- Market lot: 15 Shares
- Listing At: NSE, BSE
- Minimum order quantity: 15 Shares
- DRHP: Click here
Purpose of Issuing Stock
There is a certain purpose of the company behind issuing the stock in the market.
- The working capital requirement is one of the main purposes of issuing stocks.
- Issuing stock can enhance the brand name, corporate image.
- It helps to provide enough liquidity o shareholders.
- It will also provide the public market for the equity shares.
About the Company
For any company’s financial review, besides financial statement company background is also important.
- According to CRISIL research Varroc is the second largest Indian auto component group.
- It is also a leading tier-1 supplier and manufacturer of Indian two & three wheeler.
- The company considers as the sixth-largest interior automotive lighting manufacturer and
- It is also one of the top three independent exterior lighting companies in India.
- Engaged in design, R&D, testing, engineering, supply and manufacturing of various products across the business.
- It has a global footprint of 36 manufacturing facilities spread across seven countries in the world.
- Among the 36 facilities 6 facilities for the global lighting business and 25 for India business and 5 for other types of business.
Varroc Engineering Ltd Management Group
- Managing Director: Tarang Jain
- Wholetime Director: Ashwani Maheshwari
- Independent Director: Gautam P. Khandelwal
Varroc Engineering IPO Review:
From the above financial statement, it is clearly visible that the net profit slightly decreases in FY 2016-17 from FY 2015-16 but the increasing amount of profit from FY 2014-15 to FY 2015-16 is quite prominent here. Now let’s come to the other information, taken from DRHP or draft red herring prospectus. Based on DRHP information, in the last FY 2016-17, the company’s EPS stands at 26.90 as per the Basic Earnings Per Share (consolidated). P/E ratio is not available in this prospectus. As per the last FY RoNW is 13.88% which is quite lower than the previous FY 2015-16 21.15%. Lastly, let’s come to NAV/share which is 190.51 (consolidated) as per the FY 2016-17.
If you still want to sure about the strength of the company’s IPO, you can check the NSE bid details, will available on the last day of application. In order to clarify the IPO application steps, you can go through this link that can guide you in understanding the steps to apply. Based on the available information Varroc Engineering IPO Review carries a NEUTRAL view. According to the Varroc Engineering IPO Review investors can take a chance in long-term investment. This may be beneficial for them.