Varroc Engineering Limited has formed a joint venture with Forsee Power SA to scale electric vehicle battery solutions in India. The deal involves Varroc acquiring a 45% equity stake in Forsee Power India Private Limited and exercising management and operational control over the entity.

The Board of Directors approved the investment at its meeting on October 16, 2026. The transaction includes the acquisition of primary and secondary equity shares and subscription to Optionally Convertible Redeemable Preference Shares (OCPRS). The initial consideration does not exceed €4.5 million, comprising equity shares and optionally convertible redeemable preference shares. Completion is subject to fulfilling conditions precedent set out in the Securities Subscription and Purchase Agreement (SSPA).

Strategic Rationale

The proposed investment aligns with Varroc's strategic objectives to expand its footprint in the electric mobility sector. Forsee Power India specializes in manufacturing, assembly, testing, and validation of battery pack systems and battery management systems for electric vehicles. This move strengthens Varroc’s capabilities in critical EV components, complementing its existing automotive product portfolio.

The joint venture will initially focus on battery packs for three-wheelers, with a roadmap to address two-wheelers, light commercial vehicles, buses, trucks, off-highway and industrial vehicles. Arjun Jain, Whole Time Director & CEO – Business I at Varroc, stated that the partnership combines complementary strengths in battery-system technology, automotive engineering, manufacturing, and customer relationships.

Transaction Details

Upon completion, Varroc will hold 2,95,398 equity shares, resulting in a 45% equity stake, along with 80,380 optionally convertible redeemable preference shares (OCPRS). The consideration will be paid in cash. The transaction does not constitute a related party transaction, as no promoters or group companies have any interest in Forsee.

Financial Performance of Target

Forsee Power India was incorporated on July 6, 2020. The company has demonstrated significant revenue growth over the past three financial years, reflecting the expanding demand for electric mobility solutions in India.

What the Numbers Show

Forsee Power India’s turnover grew from ₹2.19 crore in FY23 to ₹18.84 crore in FY26, indicating a substantial scale-up in operations despite a dip in FY25. The unaudited FY26 figure represents a near-doubling from the audited FY25 levels, suggesting strong momentum in the electric mobility segment. Varroc’s entry at this stage allows it to capitalize on this growth trajectory while securing a strategic foothold in battery management systems. By combining Varroc's manufacturing expertise with Forsee's battery technology, the JV aims to enhance addressable content per electric vehicle across multiple segments.

Varroc Engineering Limited received a compounding order of ₹3,91,000 from the Reserve Bank of India (RBI) on October 13, 2026. The penalty addresses delays in repatriating dues receivable from a foreign entity under the Foreign Exchange Management Act (FEMA).

The company filed an application with the RBI seeking compounding for contraventions related to the delay in repatriation beyond the prescribed period. This action falls under Regulation 9(4) of the Foreign Exchange Management (Overseas Investment) Regulations, 2022.

Regulatory Compliance and Impact

The RBI’s Foreign Exchange Department in Mumbai disposed of the compounding application upon issuing the order. Varroc stated that apart from the payment of the compounding amount, there is no material impact on its financial, operational, or other activities.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that the matter has been resolved through this regulatory mechanism.

What the Numbers Show

The financial exposure from this regulatory event is minimal relative to typical corporate operations. The compounding amount of ₹3,91,000 represents a one-time administrative cost rather than a significant operational liability. The explicit statement of "no material impact" suggests the underlying transaction volume involved in the delayed repatriation was likely modest or the delay period was short enough to warrant a lower penalty tier under FEMA guidelines.