TVS Supply Chain Solutions Plans Rs.5,000 Crore IPO

In one of the most recent filings for an IPO, TVS Supply Chain Solutions has filed its draft red herring prospectus (DRHP) with SEBI to raise Rs.5,000 crore via the IPO route. The SEBI approval process typically takes about 2 to 3 months so the approvals for the IPO should come in closer to May 2022.

TVS Supply Chain Solutions IPO will comprise of Rs.5,000 crore and fresh issue of Rs.2,000 crore, also simultaneous offer for sale (OFS) of up to Rs.3,000 crore. The promoters and early investors of TVS Supply Chain Solutions will reportedly sell part of their stakes in the OFS. The company provides end-to-end logistics solutions for business.

The fresh issue portion will be utilized by the company to pare its debt and also for aggressive organic and inorganic expansion of its footprint. The OFS would be to give an exit to early investors and promoters. Some of the early investors in TVS Supply Chain Solutions include names like Mitsubishi Corporation, Tata Opportunities Fund, Gateway Partners and Exor. However, the extent of sale by each of the investors is yet to be disclosed.

If the issue gets approved, then TVS Supply Chain Solutions becomes the third major logistics company to take the IPO route to raise money this year. Digital logistics enabler, Delhivery, has filed its DRHP to raise Rs.7,460 crore and that has already been approved by SEBI. The other logistics IPO is the Rs.4,800 crore IPO of Delhi-based ECOM Express. Here the DRHP for the public issue is yet to be filed by the company.

Check - Delhivery IPO - 7 Things to Know

TVS Supply Chain Solutions has a pedigree of over 27 years. It started off as TVS Logistics in the year 1995 and this logistics business was hived off as a separate company in 2004. Today, it has become a reputed logistics services provider. Between 2004 and 2021, the revenue of TVS Supply Chain Solutions grew at CAGR of 36% to $1 billion levels. In the last 15 years, the operating profits of the company are also up 37% CAGR.

Kotak Special Situations Fund had invested Rs.1,000 crore in TVS Supply Chain Solutions in September 2021. Logistics has emerged as the fastest growing segment of business and increasingly companies are looking to separate the logistics business into a separate supply chain channel so as to get the best value for the business. Separating the logistics franchise also ensures better value realization for the business.

As India embarks on aggressive programs like Make in India, Export push and Atma Nirbhar Bharat; efficient and cost effective logistics hold the key to better and timely delivery of commitment to customers. TVS Supply Chain Solutions may surely be positioned in the right place at the right time.

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