IPO-bound TVS SCS raises Rs 520 cr from Hero, Bajaj, SBI and others

Company has sought market regulator's approval to raise as much as Rs 750 cr

TVS Supply Chain Solutions (TVS SCS) has in the last four months raised Rs 520 crore from a group of investors including Hero Enterprise, Bajaj Holdings and State Bank (SBI) of India as it plans an initial public offering (IPO).

The company, which is part of the TVS family, on Friday sought market regulator Sebi’s approval to raise as much as Rs 750 crore through the IPO. Out of the Rs 520 crore that the company has raised since December, Hero Enterprises invested around Rs 250 crore, SBI around Rs 100 crore and Bajaj Rs 50 crore. The investments take their stakes to around 4 per cent, 1.5 per cent and less than 1 per cent respectively. Another commitment of Rs 100 crore has been received from a prominent family office in Mumbai for investment by Q1 of this year, according to sources.

The company’s existing shareholders, including parent group TVS Mobility and investors Tata Capital Financial Services and Omega TC Holdings, are planning to sell as many as 20 million shares in the IPO. This will be the first IPO by a TVS Family company in three decades, after TVS Electronic in 1994.

TVS Supply Chain submitted its IPO document with Sebi in February 2022 to raise around Rs 2,000 crore, but the process was delayed due to market conditions.

“To fuel its business expansion plans, TVS SCS has already raised primary capital of Rs 418 crore cash and a share swap through minority stake purchase of its subsidiary - White Data Systems from Cholamandalam Finance. Marquee investors such as State Bank of India, Bajaj Holding, and Hero Enterprises have come on board now,” said a source aware of the development.

The IPO size has reduced from the initially planned Rs 2,000 crore to Rs 750 crore, as the company has already raised Rs 520 crore. The size of offer for sale (OFS) also reduced from 59.5 million equity shares by existing investors to 20 million now. TVS SCS is promoted by TVS Mobility Group, T S Rajam Rubbers, Dhinrama Mobility Solution and Ramachandhran Dinesh. According to sources, promoters like Dinesh are not participating in the IPO proceeds due to lower valuation.

While TVS Mobility holds 26 per cent in the company, TS Rajaram Rajam Rubbers has 15 per cent, and Exor has 10 per cent stake in the company. Exor is controlled by Italy’s Agnelli family. Globally, Exor-invested companies include global majors like Ferrari, Fiat, Chrysler Automobiles, PartnerRe, CNH Industrial, and, not least, the Economist Group and Juventus Football Club.

According to sources, the company has grown in high double digits and is likely to close FY23 with Rs 10,300 crore as revenue, up from Rs 7,855 crore last year. The net profit of the organisation also grew by 20 per cent during the year. JM Financial, Axis Capital, J. P. Morgan, BNP Paribas, Edelweiss Financial Services and Equirus are the book running lead managers (BRLMs).