TVS Supply Chain Solutions Limited IPO Closed

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IPO date 10 Aug 2023 – 14 Aug 2023
Listing date 23 Aug 2023
Price range 187 – 197
Minimum order quantity 76
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Commencing operations in 1995 as TVS Logistics and incorporating in 2004 as a separate company, TVS Supply chain solutions Limited is a Globally operating supply chain management services company having 10,531 customers spanning across industries such as automotive, industrial, consumer, and tech and tech infra like Daimler India Commercial Vehicles Pvt Ltd, Sony India Private Limited, Hyundai Motor India Limited, Hero MotoCorp Limited, Modicare Limited, Ashok Leyland Limited, Yamaha Motor India Private Limited and Torrot Electric Europa during Fiscal 2022.

It is India’s largest supply chain solutions provider in terms of consolidated revenue and it is also amongst the top three longstanding supply chain solutions providers in India in terms of years of operations.

The company’s operations are mainly divided into two segments:

(i)integrated supply chain solutions (ISCS); and (ii) network solutions (NS)

ISCS: includes sourcing and procurement, integrated transportation, logistics operation centers, in-plant logistics operations, finished goods, aftermarket fulfillment, and supply chain consulting.

NS: Global forwarding solutions (GFS), 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 (TCFMS) which involves closed-loop logistics and support including spares logistics, break-fix, refurbishment and engineering support, and courier and consignment management.

Revenue from operations - Segment-wise (%)

Particulars 9M FY23 FY22 FY21
ISCS 42 40 46
NS 58 60 54
In the global market, it’s key geographies outside of India, include the United Kingdom, Europe, Asia-Pacific and North America.

Revenue from operations - Geography-wise (%)

Particulars FY22 FY21 FY20
India 26 24 29
Rest of the world 74 76 71

About the industry:

According to the Redseer report, The Indian logistics market presents a large addressable opportunity, with direct spending on logistics of US$216 billion in Fiscal 2020 and US$180 billion in Fiscal 2021 due to the COVID-19 pandemic and subsequently, recovered to reach US$205 billion in Fiscal 2022. The Indian logistics market is expected to grow to approximately US$385 billion by Fiscal 2027 at a CAGR of 13% from Fiscal 2022 to Fiscal 2027.

Out of this market opportunity, the size of the outsourced supply chain solutions market (excluding e-commerce) in Fiscal 2022 was US$ 7.5 to US$ 7.7 billion, which is expected to grow at a CAGR of 20-22% to approximately US$20 to US$21 billion by Fiscal 2027.

The global logistics market presents a large opportunity for third-party logistics providers, with spending on logistics of US$11.3 trillion in 2021, and is expected to grow to approximately US$13.6 trillion by 2026 at a 6.7% CAGR from 2020- 2026 (estimated).

In addition, the COVID-19 pandemic has made companies further realize the complexity in supply chains, and as a result, the demand for end‐to‐end outsourcing continues to rise and organizations are increasingly open to engaging third-party logistics providers to manage their logistics and supply chain requirements. Out of this opportunity, the size of the global third-party logistics market in 2021 was US$1.4 trillion and is expected to grow at a CAGR of 8.2% from 2020-2026 (estimated) to a size of US$1.7 trillion by 2026(Source: Armstrong Report).

The Rs. 880 crores public offer of TVS Supply Chain Solutions Limited comprises fresh equity issue worth 600 crores and OFS worth 280 crores.

Objects of the issue and proceeds utilization

Purpose Proceeds (₹ crores)
Prepayment or repayment of all or a portion of certain outstanding borrowings by the Company and Subsidiaries 600
General corporate purposes Balance

Financial information and other valuation metrics (₹ crores)

Financial Year Total Assets Total Revenue Profit After Tax EPS EBITDA
March 31, 2021 2378.9 6700                   (73.9) (2.26) 386.7
March 31, 2022 2543.5 9300 (44.9) (1.44) 612.6
Dec 31, 2022 2635.8 7919.8 54.1 1.38 513.8

Comparison with some of the listed peers (As per the available dates):

Company Operating Income (₹ crores) - Sep 30, 2022 PE Ratio (Apr 19, 2023) EPS
TVS Supply chain 5419.2 NA (1.44)
Mahindra Logistics 2526.2 75.29 5.16
Delhivery 3541.8 NA (16.98)
TCI Express 600.3 44.83 33.48
Blue Dart Express 2618.3 37.41 161.08

Risk factors to consider:

Margin pressure due to increase in costs: The company may not be able to pass on any increase in operating costs to their customers and the inability to control such costs may adversely affect the business, financial condition, results of operations, and cash flows.

Dependence on long-term contracts: Companies typically enter into long-term agreements with their customers and if their key customers (Top 10 who contribute 25% of the business) do not renew their agreements or expand the scope of services or if the long-term relationships get impaired or terminated the business, financial condition, results of operations and cash flows could be adversely impacted.

Losses in last 3 years: The company incurred losses in Fiscals 2020, 2021, and 2022, and the nine-month period ended December 31, 2021, and any similar losses in the future may adversely affect the business, financial condition, and cash flows.

Seasonality in operating results: Given the global nature of operations, seasonal trends or country-specific holidays along with the seasonal nature of some of their customers’ businesses could result in the quarterly financial results fluctuating. For example, during the Chinese New Year period in China and South- East Asia, the company is subjected to seasonal fluctuations in demand.

IPO Schedule

Issue Period 10th August to 14th August 2023
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 18th August 2023
Initiation of Refunds 21st August 2023
Credit of Shares 22nd August 2023
Date of Listing 23rd August 2023
Mandate end date 29th August 2023
Anchor Investors Lock-In End Date 13th September 2023

How to apply to the TVS Supply Chain Solutions Limited IPO?

You can apply for the TVS Supply Chain Solutions Limited IPO using any supported UPI app by following two steps:
  • Enter your bid on Kite
  • Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for TVS Supply Chain Solutions Limited IPO?

You can check the allotment status for the TVS Supply Chain Solutions Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.