TVS SCS gears up for IPO; family settlement may get NCLAT nod in 6 weeks

TVS Supply Chain Solutions, the logistics arm of $8.5-bn TVS Group, will launch a Rs 3,000-cr IPO sometime in 2022-23

TVS Supply Chain Solutions (TVS SCS), the logistics arm of $8.5 billion TVS Group, is all set to come up with over Rs 3,000 crore initial public offering (IPO) in 2022-23, immediately after the family settlement gets a National Company Law Tribunal (NCLAT) nod.

According to sources aware of the development, NCLAT's clearance for the independent structure of group companies as part of the settlement is expected to come within the next six weeks.  As part of the restructuring exercise, each family group will get complete ownership of the businesses they manage while scrapping the holding company.

"We expect the settlement process to get a final nod for NCLAT within six weeks. For TVS SCS, IPO is the next logical step.  Once the settlement is through, we will go to the board for approval and float papers," said a source aware of the development. Another source indicated that the company has already appointed its advisors and is likely to come up with the draft prospectus by the end of this quarter.  In terms of revenue, with Rs 6,950 crore revenue, TVS SCS is the third-largest company in the group after TVS Motor and Sundaram-Clayton.

"We are expecting our revenue to touch around $2.5 billion, mainly driven by a rise in share from Indian market from 25 per cent to 40per cent by 2025. We are targeting both organic and inorganic growth for this,"  the source added. The company is also targeting to achieve $100 million in profit and to be among the top 50 global supply chain solutions companies by 2025.

The company had pioneered the concept of third party logistics in India way back in 1995 and is now an end-to-end Supply Chain Solutions provider.  Around 57 per cent of its client base is from non-auto businesses and 95 per cent from non-TVS companies. A larger share of its clients is from consumer durable, telecom, electronics.  automobile and defence sectors. It has seen high revenue growth of 36 per cent and EBITDA growth of 37 per cent CAGR on EBITDA since 2005, a source added.

In October last year, the company had raised around Rs 590 crore from a fund managed by Exor, the Europe-based leading diversified holding company controlled by the Agnelli family. TVS SCS will use the fund to grow its business, further strengthen its technology capability, and for other transformational initiatives. Prior to this, it had also raised Rs 1,000 crore from Kotak Special Situations Fund, of which around Rs 800 crore was reportedly used for the promoter family to buy out the Canadian Pension Fund's entire stake in the company.

Recently, it the group had also kick-started a series of demergers and amalgamations between holding company TV Sundram Iyengar & Sons group companies and some group companies, as part of the settlement process.