Privilege and prejudice have a price. Varnam is the story of seventeen year old Mani learning that the hard way. Unable to put up with Mani's troublesome antics, his mother sends him to his distant uncle Durai’s home for his +2 studies. Mani, who had lost his father in a tragic caste related incident in their village ten years ago, wishes to seek revenge for his father’s death. But, he doesn’t know Velu, a lower caste person, who was responsible for his father’s death. Mani understands that memory is necessary for revenge and he keeps his desire for revenge alive by repeatedly sketching his father's image.

Mani's uncle Durai and his partner Rathnam own a mid size coffee estate. They use their position and money to exploit the helpless lower caste farmers. Durai takes Mani under his wings and Mani enjoys every bit of his uncle’s authority. Durai also wants to marry Rathnam’s sister Kavitha who happens to be Mani's teacher at school.

Kavitha becomes very upset with Mani’s prejudiced behavior when he humiliates a lower caste teacher in the class. To Mani's chagrin, Kavitha asks Mani to learn from Thangam, a fellow student who is also a lower caste girl. As Kavitha learns more about Mani and his sketching, she is supportive of his talent and this helps Mani to see Kavitha in a totally new light.

This is the setup in which Mani’s journey into adulthood starts where he is deeply influenced both by his uncle Durai and his teacher Kavitha. His inner turmoil to reconcile with his prejudices, his desire to seek revenge, his liking for Thangam and certain irrevocable and violent consequences of his seemingly casual acts form the rest of the story of this powerful action drama.