TVS SCS set to float Rs 5,000 crore IPO once Sebi nod comes through

The TVS Group's family recast deal got final nod from NCLAT, based on which each of the four family groups got ownership of the businesses they were managing, scrapping the holding company format

TVS Supply Chain Solutions (TVS SCS), part of the Rs 15,000 crore TVS Mobility Group, is set to become the first company from the TVS fold to come out with an initial public offering (IPO), after the family received the final nod for its rearrangement early this month.

The company had approached the Securities and Exchange Board of India (Sebi) to raise around Rs 5,000 crore--including a fresh issue of Rs 2,000 crore and an offer for sale of up to Rs 3,000 crore, said a source aware of the development. It was on February 4 that the $8.5 billion worth TVS Group's family rearrangement agreement got its final nod from the National Company Law Tribunal (NCLAT), based on which each of the four family groups got ownership of the businesses they were managing while scrapping the holding company structure. As part of the OFS, 59.48 million shares are to be sold by promoters and other investors including Tata Opportunities Fund, Mitsubishi Corporation and Gateway Partners.

TVS SCS is an integrated logistics service provider engaged in outsourced supply chain management, freight forwarding and last-mile fulfilment. R Dinesh, a fourth-generation TVS Scion, is the founder of TVS SCS and was instrumental in its growth over the years. On January 25, Business Standard had reported that the company is all set to file its draft prospectus during the current quarter itself. TVS SCS is the third-largest company among all the four TVS families, with a revenue of Rs 6,950 crore, after TVS Motor Company and Sundaram-Clayton. The company started as a division of TV Sundram Iyengar & Sons in 1996 and became its wholly-owned subsidiary in December 2004. The money raised will be used to pay off its debt and for expansion plans.

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 reportedly seen high revenue growth of 36 per cent and EBITDA growth of 37 per cent CAGR on EBITDA since 2005.

TVS SCS had raised around Rs 590 crore in October 2021 from a fund managed by Exor, the Europe-based leading diversified holding company controlled by the Agnelli family, to grow its business, further strengthen its technology capability, and for other transformational initiatives. Exor is known for its investments in global majors like Ferrari, Fiat, Chrysler Automobiles, PartnerRe, CNH Industrial, and, not least, the Economist Group and Juventus Football Club. Before that, the company had also raised around 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.