TVS Supply Chains Solutions Limited IPO

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i. TVS Supply Chain Solutions (TVS SCS) is a global provider of world-class, end-to-end supply chain services across a variety of sectors. They specialize in providing revenue growth, inventory reduction, and operating costs reduction.

ii. They have over 100 years of experience addressing supply chain challenges for international organizations, government departments, large and medium-sized businesses through their fully integrated service offerings.

iii. TVS SCS offers a wide range of services including Integrated Supply Chain Solutions (ISCS), Consultancy & Professional Services, Product Management Solutions, Global Procurement, Refurbishment and Returns, Aftermarket Support, Manufacturing Support, Warehousing, Storage & Distribution, Transportation & Integrated Logistics, Global Forwarding Solutions (GFS), Digital Customer Solutions, Spare Parts Logistics, Technical Deployment and Maintenance, Specialist Logistics Services, Innovation & Technology and Value Added Services.

iv. Some of their customers with whom the company have had long term relationships include Sony India Private Limited (12 years), Hyundai Motor India Limited (13 years), Johnson Controls-Hitachi Air Conditioning India Limited (3 years), Ashok Leyland Limited (17 years), TVS Motor Company Limited (17 years), Diebold Nixdorf (8 years), TVS Srichakra Limited (10 years), Lexmark International Technology Sarl (6 years), etc.

Competitive Strengths

i. Critical scale in a fast-growing and fragmented third-party logistics market in India
ii. Leader in end-to-end solutions enabled by domain expertise, global network and knowledge base
iii. Robust in-house technology differentiation

Objects of the TVS Supply Chains Solutions Limited IPO:

The Offer comprises the Offer for Sale and the Fresh Issue. The Company proposes to utilise the Net Proceeds towards funding the following objects: 1. Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company and the Subsidiaries, TVS LI UK and TVS SCS Singapore; and 2. General corporate purposes.

TVS Supply Chains Solutions Limited IPO Details:

Open Date: Aug 10 2023
Close Date: Aug 14 2023
Total Shares: 44,670,051
Face Value: ₹ 1 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 600 Cr.
Lot Size: 76 Shares
Issue Price: ₹ 187- ₹197 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 23 2023

Promoters And Management:

i. Ravi Prakash Bhagavathula is the Global Chief Financial Officer. He joined the Company on May 31, 2018. He holds a bachelor’s degree in mechanical engineering from Andhra University and a masters’ degree in business administration from University of Delhi. He has over 26 years of experience in finance and strategy. Prior to joining the Company, he worked with Pfizer Limited as finance director, the Coca-Cola group in various capacities, Procter & Gamble India Limited as assistant manager and Steel Authority of India Ltd as junior manager. ii. P D Krishna Prasad is the Company Secretary and Compliance Officer of the Company. He joined the Company and was appointed as the Company Secretary with effect from April 3, 2015. He holds a bachelor’s degree in commerce from University of Calicut, bachelor’s degree in law from Bangalore University and a masters’ degree in business administration from University of Madras. He is a member of the Institute of Company Secretaries of India. He was also elected as associate of the Institute of Chartered Secretaries and Administrators, London. He has over 26 years of experience in corporate secretarial discipline. iii. Baminee Viswanat is the Global General Counsel. She joined the Company on January 2, 2019. She holds a bachelor’s degree in law and a masters’ degree of arts in political science from University of Madras. She has over 28 years of experience in legal and secretarial matters. Prior to joining the Company, she has worked with Lenovo (India) Private Limited as director, legal & company secretary, Vijay Television Private Limited as senior manager (legal), Thomson India Private Limited as senior legal counsel, Aswini Biopharma Limited as a company secretary, Malladi Drugs and Pharmaceuticals Limited as assistant secretary-cum-officer (legal) and Kausik Chemicals Limited as an officer (legal).

Financials of TVS Supply Chains Solutions Limited IPO:

A. Balance Sheet
Particular (In Crore) Mar-21 Mar-22 Mar-23
Equity Share Capital 31.762 36.296 36.426
Reserves 440 678 687
Borrowings 1,548 1,764 1,990
Trade Payables 1,154 1,453 1,427
Other Liabilities 1,766 1,859 2,070
Total Liabilities 4,468 5,076 5,487
Net Block 345 327 326
Capital Work in Progress 7 3 14
Investments 98 100 105
Other Assets 1,928 2,113 2,312
Total NC Assets 2,379 2,544 2,757
Receivables 1,160 1,307 1,228
Inventory 228 292 345
Cash & Bank 537 994 1,086
Other Assets 627 653 795
Face value 1 1 1
B. Profit &  Loss Statement
Particular (In Crore) Mar-21 Mar-22 Mar-23
Sales 6,934 9,250 10,235
Raw Material Cost 25 12 11
Purchases of Stock In Trade 952 1,224 1,412
Change in Inventory -44 -64 -40
Employee Cost 1,805 1,889 2,093
Other Expenses 3,809 5,577 6,075
Other Income 66 50 76
EBITDA 453 663 759
EBITDA Margin 6.53% 7.16% 7.42%
Depreciation 443 461 524
Interest 176 155 190
Profit before tax -116 14 40
Tax -43 58 -2
Net profit -74 -45 42
NPM (%) -1.09% -0.49% 0.41%
C. Cash Flow Statement
Particular (In Crore) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 493 708 757
Receivable 174 -199 93
Inventory -44 -66 -41
Payable 93 304 -106
Other WC Items -1 -110 83
Working Capital Changes 222 -71 28
Direct Taxes -3 -16 -73
Net Cash Inflow from Operating Activity 712 621 712
Cash from Investing Activity
Fixed assets purchased -117 -116 -166
Fixed assets sold 5 16 5
Investment sold 0 1 0
Investment in group cos -0.2 0 0
Inter-corporate deposits 231 27 -83
Other investing items -57 -308 -10
Net cash inflow from investing activities 63 -381 -255
Cash from Financing Activity
Proceeds from shares 0 457 0
Proceeds from borrowings 0.4 267 128
Repayment of borrowings -705 -51 -245
Intrest paid fin -90 -61 -101
Dividends paid -0.12 -0.24 0
Other financing items -372 -395 -159
Net Cash Flow -392 458 81

Comparison With Peers:

Peer ( fig. in Cr) Revenue EBITDA PAT 3 year CFO Mcap Mcap/Sales P/E
TVS Supply 10300 759 40 2000 8700 0.84 218
Mahindra Logistics 5100 261 25 604 2593 0.51 800
Blue Dart Express 5172 861 371 2327 15000 2.90 50
TCI Express 1241 194 140 377 6100 4.92 43

Recommendation on TVS Supply Chains Solutions Limited IPO:

Analysis of TVS Supply Chain Solution Provider IPO by IZ team is 6/10 1. Overview: TVS Supply Chain Solution has emerged as India's largest and one of the fastest-growing integrated supply chain solutions providers. Based on the information provided, it is the top player among its peers in terms of revenue and revenue growth for FY23. 2. Services Offered: The company provides a diverse range of services through the use of software. Some of their key offerings include: a) i-Loads: A marketplace for fleet owners and logistics service providers. b) Visibility: A system to enhance warehouse management capabilities. c) TRACE: Designed to support spare parts logistics. d) LCL Consolidator: An app to streamline container operations. e) e-Connect: An online platform for warehousing and other related tasks. f) Courier Alliance: A marketplace for last-mile delivery. g) Cargo Wise: Offers real-time visibility for order and shipment tracking. This suggests that TVS Supply Chain provides a holistic approach to supply chain solutions, catering to a wide array of requirements. 3. Financial Performance: a) Revenue has seen a significant growth, moving from 7000 Cr in FY21 to 10300 Cr in FY23. b) The company was in a loss until FY22 but managed to register a profit after tax (PAT) of 40 Cr in FY23. c) Major expenses include Other Expenses, Employee Benefits, and a noteworthy amount towards Depreciation. d) The depreciation of approximately 523 Cr in FY23 stands out, suggesting heavy investments in assets or infrastructure. 4. Cash Flow: Cash flow from operations over the past three years is robust at around 2000 Cr. This is an encouraging sign for investors as it implies the business generates a substantial amount of cash from its core operations. The discrepancy between profits and cash flow can be attributed mainly to the high depreciation costs. 5. Valuation: The company's market capitalization (M.Cap) for the IPO is approximately 8700 Cr with a Price to Earnings (P/E) ratio of 218x. This suggests that the company is priced on the higher side, possibly reflecting market optimism about its future growth prospects or the value of its suite of software solutions. 6. Conclusion: a) Pros: (i) Comprehensive suite of software solutions catering to various supply chain needs. (ii) Strong revenue growth. (iii) Healthy cash flow from operations. b) Cons: (i) High valuation in terms of P/E ratio. (ii) The company only recently turned profitable. Given the above analysis, investors need to weigh the company's growth prospects, its suite of software solutions, and its financial health against the concerns of its high valuation and recent move into profitability.

Registrar of TVS Supply Chains Solutions Limited IPO:

  1. Link Intime India Private Limited

Company Address:

10 Jawahar Road, Chokkikulam, Madurai – 625 002, Tamil Nadu, India

Discussion on TVS Supply Chains Solutions Limited IPO:


    1. The company follows an asset-light business model for its operations.

    2. Warehouses and vehicles are acquired through leasing arrangements with network partners and third-party providers.

    3. Services provided by these partners include warehouses, vehicles, air and ocean carriers, and manpower.

    4. The company’s time-critical final-mile solutions (TCFMS) business involves the use of independent self-employed couriers and engineers.

    5. The company has limited control and oversight over its network partners, including third-party fleet partners, carrier providers, independent contractors, and other third parties.

    1. The company generates a significant portion of its revenues from sources outside India.

    2. These revenues are denominated and transacted in foreign currencies, exposing the company to foreign exchange risk.

    3. In fiscal years 2021, 2022, and 2023, revenue from operations from the rest of the world segment accounted for 75.87%, 73.66%, and 70.43% of the company’s consolidated revenue, respectively.

    4. The company incurs expenses in foreign currencies related to its international operations, including salary costs and rent.

    5. Despite the reporting currency being Indian Rupees, the company’s subsidiaries in 26 countries conduct transactions in their respective functional currencies, such as the U.S. Dollar, Euro, Singapore Dollar, British Pound, Australian Dollar, Hong Kong Dollar, Thai Baht, Malaysian Ringgit, Indonesian Rupiah, South Korean Won, New Taiwan Dollar, and New Zealand Dollar.

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