Company and IPO Overview:
TVS Supply Chain Solutions Limited stands as India's largest and one of the fastest expanding integrated providers of supply chain solutions among the listed Indian companies in this sector, both in terms of revenue and revenue growth. TVS Supply Chain Solutions has managed large and complex supply chains across multiple industries in India and selected global markets through customized tech-enabled solutions for more than 16 years. It is a part of the TVS business group.
The company offers its services in 2 segments:
Integrated Supply Chain Solutions (“ISCS”): The capabilities under the ISCS segment include sourcing and procurement, integrated transportation, in-plant logistics operations, logistics operation centres, finished goods, aftermarket fulfillment and supply chain consulting.
Network Solutions (“NS”): The capabilities under the ISCS segment include e global forwarding solutions (“GFS”), which involves managing end-to-end freight forwarding and distribution across ocean, land and air, warehousing and at port storage and value-added services, and time-critical final mile solutions.
TVS Supply Chain Solutions (TVS SCS') provided supply chain solutions to over 10,531 and 8,115 customers during Fiscal 2022 and the nine-month period ended December 31, 2022, globally, and to over 1,044 and 733 customers, respectively, in the same periods, in India. In December 2022, the company's global customers included 72 'Fortune Global 500 2022' companies, while its Indian customers included 25 'Fortune Global 500 2022' companies.
The company TVS SCS' serves customers in various sectors like automotive, industry, consumer products, technology and tech infrastructure, rail and utilities, and healthcare. It has built strong, long-lasting relationships with many of its clients. This has helped the company remain stable in terms of both making money and being profitable.
Some of the esteemed clients of TVS are Sony India Private Limited, Hyundai Motor India Limited, Johnson Controls-Hitachi Air Conditioning India Limited, Ashok Leyland Limited, TVS Motor Company Limited, Diebold Nixdorf, TVS Srichakra Limited, Lexmark International Technology Sarl, VARTA Microbattery Pte Ltd, Daimler India Commercial Vehicles Private Limited, Hero MotoCorp Limited, Modicare Limited, Panasonic Life Solutions India Private Limited, Dennis Eagle Limited, Electricity North West Limited, Yamaha Motor India Private Limited, and Torrot Electric Europa, S.A.
After a series of super successful IPOs TVS Supply Chain Solutions IPO is the next main board IPO which is ready to set its footprints in the stock market and the company is about to raise around ₹ 880 crores via IPO comprising fresh issue of ₹ 600 crores and Offer For Sale up to ₹280 crores only. The price band of the issue is ₹ 187 to ₹ 197 with a minimum market lot of 76 shares. TVS Supply Chain Solutions IPO subscription for retail quota is 10.00%, NII is 15.00% and QIB is 75.00%.
Financials (rounded off):
Date | Total Revenue (₹ in cr) | PAT (₹ in cr) |
31/03/2021 | 7000 | (76) |
31/03/2022 | 9300 | (46) |
31/03/2023 | 10310 | 42 |
Objectives of the Issue:
1. Prepayment or repayment of all or a portion of certain outstanding borrowings obtained by the Company and its Subsidiary, TVS LI UK and TVS SCS Singapore.
2. General corporate purposes.
IPO Details:
IPO Date | 10/08/2023-14/08/2023 |
Face Value | ₹1 per share |
IPO Price Band | ₹187-₹197 per share |
IPO Lot Size | 76 Shares |
Listing at | NSE, BSE |
Basis of Allotment | 18/08/2023 |
Credit of Shares in Demat | 22/08/2023 |
Listing Date | 23/08/2023 |
Pre-Issue Shareholding | 46.65% |
Post-Issue Shareholding | 41.6% |
Retail Minimum Lot Size | 76 shares (₹14,972) |
Valuations & Margins:
Indicators | FY 21 | FY 22 | FY 23 |
EPS | (2.26) | (1.44) | 1.02 |
P/E | - | - | 193.14 |
EBITDA (%) | 5.58 | 6.62 | 6.68 |
Debt/Equity | 2.92 | 2.34 | 1.61 |
ROCE (%) | (4.56) | 6.65 | 6.68 |
Important things to note about the Company:
1. TVS Supply Chain Solutions distinctive technological approach as a provider of logistics solutions enables it to increase its visibility, speed, accuracy, and cost-efficiency for clients. Moreover, the company’s ability to personalize its technology-driven services to align with the unique needs of individual customers further sets it apart in the industry.
2. TVS Supply Chain Solutions has established a track record of successful inorganic growth through strategic acquisitions that supplement its operations. It has made over 20 acquisitions in the last 16 years in order to grow across Europe, the United Kingdom, the United States and Asia Pacific.
3. The company TVS Supply Chain Solutions has developed with customers across diverse and high-growth sectors including automotive, industrial, consumer, tech and tech infra, rail and utilities, and healthcare. This offers them various outsourcing opportunities.
4. The asset-light model of TVS Supply Chain Solutions and its long-term contracts allows it to adapt across the economic cycle, reducing costs during downturns and putting it in a position to expand quickly in growing markets.
5. The logistics market in India is highly fragmented and unorganized compared to the other markets. This reduces the market penetration into the industry. This makes TVS Supply Chain Solutions Limited to be strategically positioned to capitalize on the substantial growth opportunities.
Risk factors to watch out in the IPO:
1. TVS Supply Chain Solutions obligation to repay the borrowings and the restrictions imposed by its financing agreements may reduce the funds available for purposes such as capital expenditures, acquisitions, and strategic investment as a result this will reduce the company’s flexibility in planning for or reacting to changes in the business, competition pressures, and market conditions.
2. As it can be seen that majority of TVS SCS' revenue from operations was denominated in foreign currencies, this makes the company vulnerable to foreign currency exchange rate fluctuations.
3. The working capital requirement has been increasing and an inability to meet such requirements can adversely affect its operations.
4. 38.88% revenue comes from the top 20 customers. Any termination or impairment of relationship with these customers can adversely affect the revenues of TVS Supply Chain Solutions.
5. As the entity operates on an asset-light business model, its operations are significantly dependent on network partners and other third parties for our warehousing and transportation needs. If the company is unable is retain any of its partners, it can significantly impacts the company’s operations.
Crisp Insights:
TVS Supply Chain Solutions IPO GMP Today: The Company is commanding a strong GMP of around Rs.30.
TVS Supply Chain Solutions IPO Review: Listing gains unlikely as per GMP data.
TVS Supply Chain Solutions IPO looks very expensive in valuation and hence, investors must be cautious.
Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.
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