TVS Supply Chain Solutions gets SEBI approval to launch IPO

TVS Supply Chain Solutions, a part of TVS Mobility Group, has received a green signal from capital markets regulator SEBI to raise funds through an initial public offering (IPO) route. The supply chain logistics solution provider filed an IPO document with the Securities and Exchange Board of India (SEBI) in April this year and obtained its observation letter on July 18. This is going to be the first TVS Group company to go public in 25 years. 

As per the draft document filed with SEBI, the IPO consists of a fresh issue of equity shares aggregating up to ₹2,000 crore and an offer for sale (OFS) of up to 5.95 crore equity shares by the company's promoter and existing investors.

Those offering shares in the OFS include Omega TC Holdings Pte. Ltd, Tata Capital Financial Services Ltd, Mahogany Singapore Company Pte. Ltd, TVS Motor Company Limited, Kotak Special Situations Fund, Andrew Jones, Ramalingam Shankar, Ethirajan Balaji, Dinesh Narayan and Sargunaraj Ravichandran.

The Chennai-based company intends to use more than half of its IPO proceeds raised from the fresh equity shares to repay loans and invest in its overseas operations. It also plans to use a part of the fund for the purpose of strategic acquisitions.

TVS Supply Chain Solutions (TVS SCS), a $1.2 billion organisation, is an India-based multinational company, which pioneered the development of the supply chain solutions market in India. The company claimed to be amongst India’s largest and fastest growing integrated supply chain solutions provider in terms of revenues in fiscal 2021. With a workforce of over 18,000 employees, the company has presence in over 25 countries and it works with 733 customers in India and 7,120 customers globally.  

As per the document filed with the SEBI, the global supply chain solutions company ended FY22 with a net loss of ₹44.88 crore as against a loss of ₹73.90 crore in the previous fiscal. However, the company, a part of the TVS Mobility Group, turned profitable in the H1FY23, with profit for the period at ₹38.05 crore.

The company’s revenue from operations surged 33.4% to ₹9,250 crore in FY22, from ₹6,934 crore in FY21. It continued stellar performance in six months of FY23 as well, generating revenue from operations of ₹5,419 crore, up 27.8% on a year-on-year (YoY) basis. The revenue from India operations grew 52.3% YoY to ₹1,627, while revenue from the global market rose 19.6% YoY to ₹3,792 crore, the company.

TVS SCS posted Earnings before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of ₹613 crore during FY22 and ₹332 crore in H1FY23.

Earlier this week, the company signed a business deal with the iconic Centrica Plc, an FTSE100 company that also operates British Gas, for their supply chain transformation. The deal is valid for a period of seven years and is valued at around ₹2,000 crore. 

As of September 30, 2022, TVS SCS has worked with 64 ‘Global Fortune 500 2021’ companies. As per the company, 75% of business comes from non-auto clients and 95% of business from non TVS group companies. TVS SCS has a long-term relationship with customers and the average period of relationship with the top 10 customers is 10—13 years.

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