Hi,
What's the procedure for student having F-1 visa near to complete his Bacholar degree in Engineering and want to convert it into H-1B.Is it necessary that after Graduation F-1 visa holder must have to come to home country while applying to H-1B.

To be eligible for H-1B, you need to have master degree. Bachelor degree with a number of years experience can be allowed.
You need to look for a job first and if if your employer is willing to sponsor visa for you, then the company needs to process with labor certification, etc.

You cannot change your status in US, if you get approval for H-1B, you need to leave US and have your passport stamped at the consulate in your country.