TVS Supply Chain IPO: Check Issue Size, Date and Price Band
Introduction:
After a blockbuster July, which witnessed the launch of some exciting Initial Public Offerings (IPOs), the month of August promises equal excitement for investors. As we head towards the close of the second week, a new public offering – TVS Supply Chain IPO – is awaited to hit the streets.
TVS Supply Chain IPO is opening for public subscription on Thursday, 10 August 2023. Read on to learn the crucial details of this IPO and determine whether it’s worth investing in it.
About the TVS Supply Chain:
TVS Supply Chain Solutions is an India-based multinational company that provides supply chain solutions in Indian and international markets. These solutions can be divided into Integrated Supply Chain Solutions (ISCS) and Network Solutions (NS).
The clients of the company range from other multinational companies to government organizations to large and medium-sized domestic business firms. Some of the major clients include Sony India Private Limited, Hyundai Motors, Ashok Leyland, Johnson Controls, Diebold Nixdorf, Lexmark International Technologies, Hero MotoCorp, Dennis Eagle, and so on.
TVS Supply Chain Solutions is being promoted by the TVS Group, best known for its mobility solutions.
Strengths of the TVS Supply Chain:
Below are the primary strengths of TVS Supply Chain Solutions:
- Operates in one of the fastest-growing third-party logistics markets in India
- A market leader offering end-to-end supply chain solutions empowered with domain expertise
- Possess in-house expertise in technology differentiation
- A prolonged and consistent track record of successful integration of acquisitions
- A strong relationship with clients spanning diversified industries and geographical boundaries
Weaknesses of the TVS Supply Chain:
Some risks or weaknesses associated with the TVS Supply Chain Solutions include:
- A significant portion of the revenue comes from global clients
- High dependence on third-party logistics partners and network providers
- Most of the warehouses are on lease. The assets of the company aren’t that great
- Operates in a highly competitive and fragmented industry
- Heavily reliant on technology and infrastructure for its operations
- Profits are subjected to foreign currency exchange rate fluctuations
Financial Snapshot of TVS Supply Chain:
The financials of TVS Supply Chain Solutions, as taken from the Draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), are mentioned in the table below:
| Particulars | As of and For FY Ending March 31 | ||
| 2023 | 2022 | 2021 | |
| Share Capital | 36 | 36 | 32 |
| Net Worth | 724 | 714 | 491 |
| Total Borrowings | 1,990 | 1,764 | 1,548 |
| Revenue From Operations | 10,235 | 9,250 | 6,934 |
| EBITDA Adjusted | 707 | 667 | 442 |
| Profit After Tax | 42 | -46 | -76 |
| Earnings Per Share (Diluted) | 1 | -1.4 | -2.3 |
| Net Asset Value (In Rs/share) | 431 | 463 | 607 |
| Return on Capital Employed | 7.60% | 6.70% | -4.60% |
| Return on Equity | 5.50% | -6.90% | -15.20% |
*Amount in Crores
As evident, the company turned profitable only in the Financial Year 2023, reporting a profit of Rs. 42 crores after back-to-back losses for FY 2022 and FY 2021 of Rs. 46 crores and Rs. 76 crores respectively. However, the company’s borrowings have also increased year after year to Rs. 1,990 crores in FY 23. The revenue from operations increased by 10.65% from Rs. 9,250 crores in FY 2022 to Rs. 10,235 crores in FY 2023.
Details of the IPO:
TVS Supply Chain Solutions plans to raise Rs. 880 crores from its IPO, comprising a fresh issue of up to Rs. 600 crores and an offer for sale of 1.42 equity shares worth up to Rs. 280 crores. Among the existing shareholders, Omega TC Holdings and Tata Capital Financial are offloading 1.07 crore shares and 9.84 lakh shares, respectively.
The issue opens for public subscription on 10 August 2023 and closes on 14 August 2023. The price band has been kept between Rs. 187 to Rs. 197 per share. You can subscribe for multiple lots, each containing 76 equity shares. The minimum investment required is Rs. 14,212. The shares will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
The details of the TVS Supply Chain Solutions IPO are summarised in the table below:
| IPO Date | 10 Aug to 14 Aug 2023 |
| Listing Date | 24-Aug-23 |
| Face Value | Rs. 1 per share |
| Price Band | Rs. 187 to Rs. 197 per share |
| Lot Size | 76 shares |
| Total Issue Size | 44,670,051 shares (aggregating up to Rs. 880 crores) |
| Fresh Issue | 30,456,853 shares (aggregating up to Rs. 600 crores) |
| Offer for sale | 14,213,198 shares (aggregating up to Rs. 280 crores) |
| Listing At | BSE, NSE |
What should you consider before buying?
Since its announcement, TVS Supply Chain Solutions IPO has created significant buzz among investors. But is it worth your subscription? The company has turned profitable only in FY 2023 but has the potential for further growth. Although the IPO is priced aggressively, considering the legacy of the TVS group and other strengths, you can put your money on it.
If you want to invest in this IPO, you can open a Demat account for free with Motilal Oswal and enjoy an array of exciting benefits.
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