After nearly three decades a company from the TVS group is coming out with an IPO. The Chennai-based TVS Supply Chain Solutions Limited (TVSSCS), a supply chain logistics solution provider, is raising nearly ₹5,000 crore through a market offering. It filed its Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India. TVS Electronics was the last company in the group to be listed way back in 1994.
TVSSCS, now part of the TVS Mobility Group, has four business verticals - supply chain solutions; manufacturing; auto dealership and aftermarket sales & service.
The IPO consists of fresh issue of equity shares aggregating up to ₹2,000 crore. The company’s existing shareholders, including promoters; Omega TC Holdings; Mahogany Singapore Company PTE. Ltd; Tata Capital Financial Services Ltd and DRSR Logistics Service Pvt Ltd will sell 59.48 million shares in the IPO, according to a draft prospectus.
Looking for expansion
The company will use a majority of the net proceeds from the IPO ( ₹1,166 crore) to repay or prepay its outstanding borrowings which will assist the company in maintaining a favourable debt to equity ratio and enable utilisation of internal accruals for further investment in business growth and expansion.
The company will also deploy ₹75.2 crore in fiscal 2023 towards the capitalisation of its strategically important subsidiaries in Germany, US and Thailand and to tap the growth opportunities in these markets. Further, ₹60 crore will also be infused in the company’s UK arm, to increase its stake in Rico UK to 100 per cent.
The remaining amount from the net proceeds will be deployed towards inorganic growth and general corporate purposes.
TVSSCS is the second largest company in the TVS group after TVS Motors, and the largest unlisted company in the group to go for an IPO.
Revenues at $1 billion
With revenues of $1 billion, the company has been growing at 36 per cent CAGR for the last 15 years, and expects better growth in the coming years. It has multi-sectoral clientele ranging from consumer durable, telecom, electronics and automobile with around 57 per cent of business from non-auto clients and 95 per cent business from non-TVS group companies.
The company pioneered the concept of third-party logistics in India in 1995. It is now an end-to-end supply chain solutions provider with over 17,000 employees and present across four continents and in over 20 countries. With revenue of around $2.5 billion and $100 million in profitability in 2025, TVS SCS hopes to be among the top 50 logistics companies globally.