Varroc Engineering IPO Basis of Allotment

THIS IS A PUBLIC ANNOUNCEMENT FOR INFORMATION PURPOSES ONLY AND IS NOT A PROSPECTUS ANNOUNCEMENT AND DOES NOT CONSTITUTE AN INVITATION OR OFFER TO ACQUIRE, PURCHASE OR SUBSCRIBE TO SECURITIES. NOT FOR PUBLICATION AND DISTRIBUTION, DIRECTLY OR INDIRECTLY OUTSlDE INDIA.

VARROC ENGINEERING LIMITED

Varroc Engineering Limited (our 'Company' or the 'Company') was incorporated on May 11.1988 at Mumbai as Varroc Engineering Private Limited. as a private limited company under the Companies Act. 1956. On July 1,1997, our Company was converted into a deemed public company under section 43A(1A) of the Companies Act.1956 and the word 'Private' was deleted from the name of our Company. Thereafter, on January 24,2001 our Company was again converted into a private company under section 43A (2A) of the Companies Act, 1956 and the word 'Private' was added to the name of our Company. Subsequently, our Company was converted into a public limited company pursuant to approval of the Shareholders at an extraordinary general meeting held on January 25,2018. On February 5, 2018, the name of our Company was changed to Varroc Engineering Limited and a fresh certificate of  incorporation consequent upon conversion to a public limited company was issued to our Company by Registrar of Companies, Maharashtra at Mumbai (the 'RoC'). For more information rcgarding our Company's corporate history and changes to address of  the registered office of our Company, see 'History and Certain Corporate Matters'' on page 222 of  the Prospectus.

Registered and Corporate Office: L-4. MIDC Area. Waluj, Aurangabad 431 136; Tel: +91 240 6653 700/6653 699. Fax:+91 240 2564 540;
Contact Person: Rakesh Darji, Company Secretary and Compliance Officer; Tel: +91240 6653 662; Fax: +91 240 2564 540; E-mail: investors@varroc.com;
Website: www.varrocgroup.com; Corporate Identity Number: U28920MHI988PLC047335

OUR PROMOTER: TARANG JAIN

Our Company has filed the Prospectus dated June 29,2018 with the Registrar of Companies, Mumbai (the 'Prospectus') and the Equity Shares are proposed to be listed on the National Stock Exchange of India Limited ('NSE') and BSE Limited ('BSE') and trading will commence on July 6, 2018.

BASIS OF ALLOTMENT

INITIAL PUBLIC OFFERING OF 20,221,730 EQUITY SHARES OF FACE VALUE OF Re.1 EACH (THE 'EQUITY SHARES') OF OUR COMPANY FOR CASH AT A PRICE OF RS.967* PER EQUITY SHARE (THE 'OFFER PRICE') AGGREGATING RS.19,549.61 MILLION THROUGH AN OFFER FOR SALE OF (I) 1,752,560 EQUITY SHARES AGGREGATING TO RS.1.694.31 MILLION BY, OUR PROMOTER, TARANG JAIN ('PROMOTER SELLING SHAREHOLDER'); (ii) 16,917,130 EQUITY SHARES AGGREGATING TO RS.16,354.85 MILLION BY OMEGA TC HOLDINGS PTE. LTD ('INVESTOR SELLING SHAREHOLDER 1'); AND (iii) 1,552,040 EQUITY SHARES AGGREGATING TO RS.1,500.45 MILLION BY TATA CAPITAL FINANCIAL SERVICES LIMITED ('INVESTOR SELLING SHAREHOLDER 2', WHO ALONG WITH INVESTOR SELLING SHAREHOLDER 1 ARE COLLECTIVELY HEREINAFTER REFERRED TO AS THE 'INVESTOR SELLING SHAREHOLDERS', (THE 'OFFER FOR SALE' OR THE 'OFFER' AND SUCH SHAREHOLDERS OFFERING THEIR RESPECTIVE EQUITY SHARES IN THE OFFER FOR SALE ARE COLLECTIVELY HEREINAFTER REFERRED TO AS THE 'SELLING SHAREHOLDERS' AND INDIVIDUALLY AS A 'SELLING SHAREHOLDER'). THE OFFER INCLUDED A RESERVATION OF 100,000 EQUITY SHARES AGGREGATING RS.91.90 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (THE 'EMPLOYEE RESERVATION PORTION') AT A DISCOUNT OF 4.96% (EQUIVALENT TO RS.48) ON THE OFFER PRICE ('EMPLOYEE DISCOUNT''). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS THE 'NET OFFER' AND SUCH NET OFFER AGGREGATES UPTO 20,121,730 EQUITY SHARES. THE OFFER AND THE NET OFFER CONSTITUTED 15.00% AND 14.93%, RESPECTIVELY, OF THE POST-OFFER PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY,

*Employee Discount of Rs 48 to the offer price was offered to Eligible Employees participating in the Employee Reservation Portion.

OFFER PRICE: RS.967 PER EQUITY SHARE OF FACE VALUE OF RE.1 EACH
ANCHOR INVESTOR OFFER PRICE: RS.967 PER EQUITY SHARE
THE OFFER PRICE IS 967 TIMES THE FACE VALUE

Risks to Investors:

I. The four Merchant Bankers associated with the Offer have handled 40 issues in the past three financial years, out of which 13 issues closed below the issue price on listing date.

II. The Price/Earnings ratio based on diluted EPS on a restated consolidated basis for FY18 for the Issuer at the upper end of the Price band is 28.95. Average industry peer group PE ratio is 42.60.

III. Average cost of acquisition of Equity Shares for the Selling Shareholders is in the range of Rs. 0.00 to Rs. 162.43 per Equity Share and the Offer Price at upper end of the Price Band is Rs.967 per Equity Share,

BID/OFFER PERIOD: OPENED ON: TUESDAY, JUNE 26. 2018;
CLOSED ON: THURSDAY, JUNE 28. 2018
ANCHOR INVESTOR BIDDING DATE WAS: MONDAY, JUNE 25, 2018

The Offer was made in terms of Rule19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (the 'SCRR') read wilh Regulation 41 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. 2009, as amended (the 'SEBI ICDR Regulations') and in compliance with Regulation 26(1) of Ihe SEBl ICDR Regulations, this Offer was made through the Book Building Process, wherein not more than 50% of the Net Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers ('QIBs') (the 'QIB Category'), provided that our Company and the Selling Shareholders, in consultation with the GCBRLMs and the BRLM, may allocate up to 60% of  the QlB Category to Anchor Investors, on a discretionary basis (the 'Anchor Investor Portion'), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is made to Anchor Investors. Further, 5% of the QlB Category (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QlB Category was available for allocation on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Offer Price. Further, not less than 15% of the Net Offer was available for allocation on a proportionele basis to Non-lnstitutional Investors and not less than 35% of the Net Offer was available for allocation to Retail Individual Investors, in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All Bidders (except Anchor Investors) mandatorily participated in this Offer only through the Application Supported by Blocked Amount ('ASBA')  process and providing detail of their respective bank accounl were blocked by the Self Certified Syndicate Banks ('SCSBs'). Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see 'Offer Procedure' on page 593 of the Prospectus.

The Offer received 370,410 applications for 53,775,885 Equity Shares (prior to technical rejections) resulting in 2.6593 times subscription. The details of the applications received in the Offer from various categories are as under; (before technical rejections):

Final Demand
A summary of the final demand as at diffferent Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being the NSE on July 03.2018.

A. Allotment to Retail Individual Bidders (after technical rejections.)
The Basis of Allotment to the Retail Individual Bidders, who have bid at the Cut-Off Price or at the Offer Price of  Rs.967 per Equily Share, was finalized in consultation with the NSE. This category has been subscribed to the extent of 0.8716 times The total number of Equity Shares Allotted in Retail Portion is 6,138,120 Equity Shares to 365.206 successful Retail Individual Bidder. The category-wise details of the Basis of Allotment are as under:

B. Allotment to Non-lnstitutional Bidders (After Technical Rejections)
The Basis of Allotment to the Non-lnstitutional Bidders, who have bid at the Offer Price of  Rs.967 per Equity Share or above, was finalized in consultation with the NSE. The Non-inslituiionat Portion has been subscribed to the extent of  1.4074 times. The total number of Equity Shares Allotted in this category is 3,237,295 Equity Shares to 244 successful Non- Institutional Bidder. The category-wise details of the Basis of Allotment are as under:

C. Allotment to QIBs (other than Anchor Investors)
Allotment to QIBs, who have Bid at the Offer Price of  Rs.967 per Equity Share or above, has been done on a proportionate basis in consultation wiih the NSE. This category has been subscribed to the extent of  7,7515 times of QlB Portion. As per the SEBI Regulations. Mutual Funds were Allotted 5% of the Equity Shares of QlB Portion available i.e. 237.724 Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were Allotted the remaining available Equity Shares i e. 4,516,738 Equity Shares on a proportionate basis. The total number of Equity Shares Allotted in the QlB Portion is 4,754.462 Equity Shares, which were allotted to 46 successful QlB Bidders. The category-wise details of the Basis of Allotment are as under:

D. Allotment to Eligible Employees (After Technical Rejections)
Allotment to Eligible Employees, who have Bid at the Offer Price (less Employee Discount) of Rs.919 per Equity Share or above, has been done on a proportionate basis in consultation with the NSE. This category has been subscribed to the extent of  0.5534 times of the Employee Reservation Portion. The total number of Equity Shares Allotted in the Employee Reservation Portion is 55,335 Equity Shares, which were allotted to 629 successful Eligible Employees. The calegory-wise details of the Basis of Allotment are as under:

E. Allotment to Anchor Investors
The Company and the Selling Shareholders, in consultation with the GCBRLMs and the BRLM. have allocated 6,036.518 Equity Shares to 20 Anchor Investors (through 30 Applications) at the Anchor Investor Offer Price of Rs.967 per Equily Share in accordance with the SEBI Regulations. This represents 60% of the QlB Portion.

The Board of Directors of our Company on July 4, 2016 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful Bidders. The Allotment Advice-cum-lntimations and/ or notices will be dispatched to the address of the investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfer to Public Offer Account have been issued on July 4, 2018 and payment to non-Syndicate brokers have been issued on July 4, 2018. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares Allotted to the successful Allottees have been uploaded on Juty 4,2018 for credit into the respective beneficiary accounts subject to validation of  the account details with the depositories concerned. The Company has filed the Listing application with NSE and BSE on July 4, 2018. The Company has received listing and trading approval from NSE and BSE and the trading will commence on July 6, 2018.
All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

INVESTORS PLEASE NOTE
The details of the allotment made will be hosted on the website of the Registrar to the Offer, Link Intime India Privaie Limited at  www.linkintime.co.in
All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the first/ sole Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder, and a copy of theAcknowledgment Slip received from the Designated Intermediary at the address given below:

Link Intime India Private Limited
C-101.1st floor. 247 Park, L B S Marg, Vikhroli West, Mumbai 400 083
Tel: +91 22 4918 6200; Fax: +91 22 4918 6195
E-mail: varroc.ipo@linkintime.co.in
Investor grievance e-mail: varroc.ipo@linkintime.co.in
Contact Person: Shanti Gopalkrishnan
Websile. www.linkintime.co.in
SEBl Registration No.: INR000004058

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EOUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF VARROC ENGINEERING LIMITED.