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TVS SCS gears up to launch its IPO worth INR 3,000 crore

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With eyes set on tapping upon the stock market boom, TVS Group intends to take its logistics arm public, with a ₹2,500-3,000 crore share sale in the first half of next year, people aware of the development said.

TVs group’s Logistics division, TVS Supply Chain Solutions (TVS SCS)- an asset-light business model, offers transportation, logistics, material handling, in-plant warehouse management, and aftermarket warehousing facilities to clients across automobiles, beverages, manufacturing, electronics, and defense. It also offers logistics and supply chain-related services in the UK, US, Spain, Germany, and Thailand.

The company, after driving its growth through private equity money for a long time, now feels that it is prepared to take the company public, providing an exit route to investors and also raising growth capital for the next few years,” a source said, seeking anonymity.

The preparation of the draft prospectus for the initial public offering (IPO) will be handled by JM Financial, Axis Capital, and JP Morgan. People aware of the matter say that the company is likely to add more banks to the IPO syndicate.

As per another source, the planned size of the IPO, which is set at ₹2,500-3,000 crore could change as discussions continue on the quantum of shares existing investors will sell and if promoters will also pare holdings.

He added, requesting anonymity, “The fresh capital raised will go towards reducing debt, funding working capital needs,”

TVS SCS has witnessed investments worth ₹1,600 crores from private investors in the last three months. This included the ₹590 crores raised in October from a fund managed by Exor, the Europe-based diversified holding company controlled by the Agnelli family.

In September, the logistics provider raised ₹1,000 crores from Kotak Special Situations Fund. Out of which, ₹800 crores was raised by a promoter entity of R. Dinesh, managing director of TVS SCS, to buy out Canadian pension fund CDPQ’s stake in the company and help the TVS family consolidate its holding.

TVS SCS is the second-fastest-growing company in the TVS group after TVS Automobile Ltd and contributes 10% to the group’s revenue, according to India Ratings.

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