Varroc in talks with Sintex to buy automotive moulding unit

Industry:    May, 2019

Aurangabad-based Varroc EngineeringNSE 0.23 % is in advanced talks with Sintex Plastic Technology to acquire the latter’s domestic automotive custom moulding business, according to several people familiar with the development.

Sintex Plastic, which makes plastic products for automotive and household items, is looking to sell its domestic automotive custom moulding business as part of a plan to pare its debt and focus on its core business. The company has also put its overseas automotive custom moulding business on the block, the persons cited earlier told ET, requesting not to be named.

The company had exploratory talks with several Indian auto ancillary companies before going ahead with Varroc Engineering, they said, adding that if a deal is struck, it may fetch SintexNSE 1.37 % Plastic anywhere between Rs 350 crore and Rs 500 crore.

ET’s email query to a spokesperson of Sintex Plastic remained unanswered till as of press time.

Tarang Jain, managing director of Varroc Engineering, said the company is always open to acquisition opportunities, but there is nothing on the table right now. “At any given point in time, we are on the lookout for both organic and inorganic opportunities, which can help us grow. But there is nothing to be announced at this point in time,” Jain told ET.

According to the people cited earlier, the company may be able at generate an additional Rs 1,500–2,000 crore by selling Sintex NP, its France-headquartered step-down subsidiary which is also on the block. Sintex Plastic had a debt of Rs 3,606 crore on its books at the end of September 2018, according to BSE data.