TVS Supply Chain Solutions is one of the few companies that are planning to go ahead with their public issues despite the jitteriness of the Indian stock market. The company recently filed an addendum to its draft red herring prospectus signifying its push toward making the public issue a reality. Here’s a detailed overview of the upcoming IPO of TVS Supply Chain Solutions.
Company Overview
Established in 2004, TVS Supply Chain Solutions is a TVS group company that’s primarily involved in providing integrated supply chain solutions. According to a RedSeer report, the company was adjudged as the largest supply chain solutions provider as of FY2021 in the country.
A multinational entity with four primary business verticals, TVS Supply Chain Solutions serves entities across multiple industries such as consumer, industrial, automotive, technology, healthcare, railways and utilities. In addition to supply chain solutions, the company is also into manufacturing, auto dealerships and aftermarket sales and service.
The client base of TVS Supply Chain Solutions includes marquee companies such as Mahindra & Mahindra, Hyundai Motor Company, TVS MotorCompany, Diebold Nixdorf, Panasonic Life Solutions, Sony India and Johnson Controls-Hitachi Air Conditioning India Limited, among others.
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Company Financials
The key financial metrics of TVS Supply Chain Solutions have been listed in the draft red herring prospectus and its addendum. Here’s how the company is financially positioned.
(figures are in ₹ crores)
Note:The figures except for the NAV per equity share and Diluted EPS have been expressed in ₹ crores.
Key Strengths of the Company
TVS Supply Chain Solutions has highlighted some of its key strengths in the draft red herring prospectus filed with the SEBI. Here’s a closer look at what they are.
- Large-scale service provider in a fragmented, yet fast-growing third-party logistics market
- End-to-end solutions provider with excellent domain knowledge base, expertise and global network
- Strong and scalable in-house technology
- Exceptionally consistent track record of successful integrations of multiple solutions
- Long-term relationships with clients across industries
- A robust business model with multiple profitable growth drivers
- Experienced management team
Key Risks for the Company
Just like its strengths, TVS Supply Chain Solutions has also mentioned some risks that its business faces in its DRHP. Let’s take a quick look at a few of them.
- Dependency on third parties and network partners
- Very reliant on technology and software infrastructure
- Global operations are complex and have many uncertainties and risks
- Fluctuations in foreign currency exchange rates
- The supply chain solutions industry is fragmented and very competitive
- Litigations against the promoters and the company
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Details of the IPO
According to the draft red herring prospectus filed by TVS Supply Chain Solutions Limited, its upcoming IPO consists of both a fresh issue of shares and an offer for sale (OFS) from its promoters. Through the fresh issue, the company plans to raise Rs. 2,000 crores, whereas the promoters are looking to offload about 5,94,77,497 equity shares through the OFS.
Out of the total public issue, around 75% of it has been reserved for Qualified Institutional Buyers and about 15% of it has been reserved for Non-Institutional Investors. The remaining 10% of the issue has been exclusively reserved for retail investors.
Objects of the Offer
TVS Supply Chain Solutions Limited has listed the objectives that it plans to satisfy by using the funds raised through the sale of fresh equity shares. Here’s what they are.
- Repayment or prepayment of certain borrowings availed by TVS Supply Chain Solutions and its subsidiaries such as TVS SCS Singapore and TVS LI UK
- Purchasing a minority stake from the shareholders of one of the subsidiaries of TVS Supply Chain Solutions - Rico Logistics Limited, UK
- Capitalising on important subsidiaries of the company such as TVS LI USA, TVS SCS Germany and TLM Thailand
- Inorganic growth activities of the company
- General corporate purposes
Conclusion
The recent filing of an addendum to the DRHP indicates the company’s willingness to push the IPO through despite the tumultuous market sentiment. More details regarding the public issue are likely to be revealed to the public once TVS Supply Chain Solutions Limited files the final red herring prospectus with the SEBI.
Investing in an upcoming IPO 2023 like the one from TVS Supply Chain Solutions requires you to have an active demat account in your name. If you don’t have one already, you can open a trading and Demat account within a few minutes by visiting the Motilal Oswal website and submitting an online application. The process is completely digital and can be done from the comfort of your own home.
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