The TVS Supply Chain Solutions IPO is a book-built issue valued at Rs 880.00 crores. It comprises a fresh issue of 3.05 crore shares totaling Rs 600.00 crores and an offer for sale of 1.42 crore shares totaling Rs 280.00 crores.

TVS Supply Chain Solutions IPO bidding commenced on August 10, 2023, closing on August 14, 2023. Allotment results were announced on Friday, August 18, 2023. The shares debuted on both BSE and NSE on August 23, 2023

The IPO of TVS Supply Chain Solutions has a price band of ₹187 to ₹197 per share. Retail investors need to invest a minimum of ₹14,972 for the minimum lot size of 76 shares. For sNII, the minimum investment is ₹209,608 (14 lots, 1,064 shares), and for bNII, it's ₹1,003,124 (67 lots, 5,092 shares).

Jm Financial Limited, Axis Capital Limited, J.P. Morgan India Private Limited, Bnp Paribas, Equirus Capital Private Limited, and Nuvama Wealth Management Limited serve as the book running lead managers for the TVS Supply Chain Solutions IPO. Link Intime India Private Ltd has been appointed as the registrar for the issue.

OBJECTIVE OF IPO

Net proceeds from the fresh issue will be utilized for:

• Prepayment or Repayment of all or a portion of certain outstanding borrowings availed by the company and subsidiaries, TVS LI UK and TVS SCS Singapore.
• General corporate purposes.
• Offer for Sale.

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About TVS SUPPLY CHAIN Limited

 An India based MNC company, pioneering the development of the supply chain solutions market in India. The Company is among India’s largest and fastest growing integrated supply chain solutions provider in terms of revenues in Fiscal 2022. The company is the part of the TVS Mobility Group. For more than 16 years, it has managed large and complex supply chains across multiple industries in India and select global markets through customized tech-enabled solutions.

Solutions spanning the entire value chain from sourcing to consumption and is divided into two segments:

1. Integrated Supply Chain Solutions (“ISCS”): It includes sourcing and procurement, integrated transportation, logistics operation centers, in-plant logistics operations, finished goods, aftermarket fulfillment and supply chain consulting.
2. Network Solutions (“NS”): It includes global forwarding solutions, which involves managing end-to-end freight forwarding and distribution across ocean, air and land, warehousing and at port storage and value added services, and time critical final mile solutions involving closed loop logistics and support including spares logistics, break-fix, refurbishment and engineering support, and courier and consignment management.

Growth in manufacturing and end-user sectors led to approximately 10% CAGR in domestic transportation in Fiscal 2017-Fiscal 2020 which saw a decline in Fiscal 2021 due to pandemic restricting the movement of goods. The market witnessed a strong recovery growing at 35% y-o-y in Fiscal 2022.

The Indian logistics sector is one of the largest in the world and is critical for the country’s economic growth. After contracting by 2% in Fiscal 2021, the market witnessed a strong post-COVID recovery in Fiscal 2022. The market grew by 14% and was valued at US$435 billion in Fiscal 2022 and is projected to grow to US$591 billion by Fiscal 2027 because of:

• Strong demand from manufacturing (led by “Make in India” campaign).
• Increasing shift of industry preferences towards integrated supply-chain services and other sophisticated solutions.
• Growth of ecommerce.

Government of India focus on infrastructure, favourable policies and enterprises awakening to tech-enabled logistics have put technology at the forefront of the logistics market.

RISK FACTORS FOR THE ISSUE.

• The company relies on third-party partners for certain operations, and any disruption or dissatisfaction in its services could negatively impact its overall operations, financial health, and cash flow.
• The company's heavy dependence on its technology infrastructure leaves it vulnerable to potential disruptions or failures, which could harm its growth prospects, reputation, and financial stability.
• Around 73 percent of revenue is sourced from global operations across 26 countries including UK, Europe, Australia, New Zealand, and North America, exposes the company to foreign exchange risks. Fluctuations in exchange rates could affect its financial performance.
• The company faces a potential risk due to its indebtedness and the fact that it leases all of its warehouses, as well as its registered and corporate office.
• TVS SCS' asset-light model causes high operational expenses (71 percent of FY23 revenue), including freight, handling, and personnel. Rising costs may harm cash flows and margins.
• The company gains around 18% and 28% of its revenue from its top five to 10 customers, respectively. Any loss of key customers could have an adverse impact on the finances.