TVS Supply Chain IPO: Key Dates, GMP, Price Band, Subscription Status, Allotment, and 5 Reasons to Invest

The TVS Supply Chain IPO is making a buzz in the market, investors are expecting good gains looking at the recent IPO listing. In this blog post, I will provide you with a comprehensive overview of the company, its financial performance, its growth prospects, its competitors, and how to apply for and check the status of the IPO. I hope you find this post informative and helpful.

We will also look at TVS Supply Chain IPO GMP, reason to invest, and reason not to invest in the IPO.

Consider reading: How to Check IPO Allotment Status

TVS Supply Chain IPO Key Dates and Details

Key details of the TVS Supply Chain IPO are as below:

TVS Supply Chain Company Overview

TVS Supply Chain Solutions (TVS SCS) is a leading provider of supply chain management services for international organizations, government departments, and large and medium-sized businesses.

The company was founded in 2004 as a joint venture between TVS Logistics Services Limited (TVS LSL) and UK-based Rico Logistics Limited. TVS LSL is a part of the TVS Group, which is one of India’s oldest and largest business conglomerates with interests in automotive, manufacturing, finance, education, and media.

TVS SCS offers its services in two segments: Integrated Supply Chain Solutions (ISCS) and Network Solutions (NS). The ISCS segment includes sourcing and procurement, integrated transportation, logistics operation centers, in-plant logistics operations, finished goods, aftermarket fulfillment, and supply chain consulting.

The NS segment includes global forwarding solutions (GFS), which involve 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 involve closed-loop logistics and support, including spares logistics, break-fix, refurbishment, engineering support, and courier and consignment management.

TVS SCS has a global presence across 29 countries, with 1,000+ locations and 25,000+ employees. The company serves customers across various industries such as automotive, defense, engineering, FMCG, rail, utilities, e-commerce, and healthcare.

TVS Supply Chain Financial Details

TVS SCS has shown consistent growth in its revenue and profitability over the years. Here is a quick summary of TVS Supply Chain Financial Details:

TVS Supply Chain Growth Prospects

TVS SCS has several growth drivers that can help it expand its market share and profitability in the future. Some of these are:

• Increasing demand for supply chain management services: The global supply chain management market size was estimated at USD 15.85 billion in 2019 and is expected to reach USD 37.41 billion by 2027, registering a CAGR of 11.2% from 2020 to 20271. The growth is driven by factors such as rising globalization, increasing complexity of supply chains, growing e-commerce penetration, rising customer expectations, and the need for cost reduction and efficiency improvement.
• Strong domain expertise and customer relationships: TVS SCS has over two decades of experience in providing supply chain solutions to various industries. The company has developed deep domain expertise and an understanding of customer requirements, which enables it to offer customized and innovative solutions. The company has also established long-term relationships with its customers, some of which span over 15 years. The company’s customer retention rate was 97.8% in Fiscal 2022.
• A diversified portfolio and global presence: TVS SCS offers a wide range of services across the supply chain spectrum, covering both ISCS and NS segments. The company also has a diversified customer base across various industries and geographies. The company’s revenue mix is well balanced between domestic and international markets, with 55.4% of its total income coming from India and 44.6% coming from overseas in Fiscal 2022. The company’s global presence gives it access to new markets and opportunities, as well as the ability to leverage economies of scale and best practices.
• Technology and innovation: TVS SCS invests in technology and innovation to enhance its service delivery and operational efficiency. The company has developed proprietary platforms and solutions such as TVS Digi SCM, TVS Digi Freight, TVS Digi Spares, TVS Digi Warehousing, and TVS Digi TCFMS, which enable end-to-end visibility, control, and optimization of supply chain processes. The company also uses advanced technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), robotics process automation (RPA), and blockchain to improve its service quality and customer satisfaction.

TVS Supply Chain’s Competitors

TVS SCS operates in a highly competitive and fragmented market, with both domestic and international players offering similar or complementary services. Some of the company’s key competitors are:

• Mahindra Logistics Limited: Mahindra Logistics Limited (MLL) is a leading provider of integrated third-party logistics (3PL) services in India. The company offers services such as transportation, warehousing, distribution, in-factory logistics, people transport solutions, freight forwarding, and supply chain consulting. The company serves customers across various industries such as automotive, engineering, consumer goods, e-commerce, pharmaceuticals, telecom, and retail. The company’s revenue from operations was ₹34,025.40 million in Fiscal 2021.
• TCI Express Limited: TCI Express Limited (TCI Express) is a leading provider of express delivery services in India. The company offers services such as surface express, air express, e-commerce logistics, international express, reverse logistics, priority cargo, and rail cargo. The company serves customers across various industries, such as automotive, pharmaceuticals, textiles, engineering, e-commerce, and retail. The company’s revenue from operations was ₹10,374.80 million in Fiscal 2021.
• Blue Dart Express Limited: Blue Dart Express Limited (Blue Dart) is a leading provider of courier and express delivery services in India. The company offers services such as domestic priority, dart apex, dart surplus line, smart box, regional trucking, temperature-controlled logistics, airport-to-airport, chiller network, international services, e-commerce logistics, and fulfillment services. The company serves customers across various industries, such as banking and financial services, e-commerce, pharmaceuticals, automotive, engineering, and retail. The company’s revenue from operations was ₹31, 065.90 million in Fiscal 2021.
• Allcargo Logistics Limited: Allcargo Logistics Limited (Allcargo) is a leading provider of integrated logistics solutions in India and globally. The company offers services such as multimodal transport operations (MTO), container freight stations (CFS), inland container depots (ICD), project and engineering solutions (PES), coastal shipping, contract logistics, warehousing and distribution, e-commerce logistics, and supply chain management. The company serves customers across various industries such as oil and gas, power, metals and mining, engineering and construction, automotive, and retail. The company’s revenue from operations was ₹66, 038.10 million in Fiscal 2021.

How to Apply for the TVS Supply Chain IPO

If you are interested in applying for the TVS Supply Chain IPO, you can follow these steps:

• Check your eligibility: You need to have a valid demat account and a permanent account number (PAN) to apply for the IPO. You also need to have sufficient funds in your bank account linked to your demat account.
• Choose your mode of application: You can apply for the IPO either online or offline. Online mode is preferred as it is faster and more convenient. You can use any of the online platforms, such as UPI apps, net banking portals, brokerage websites or apps, or stock exchange websites or apps to apply for the IPO.
• Fill out the application form: You need to fill out the application form with your personal details, such as name, PAN, demat account number, bank account number, UPI ID (if applicable), and contact details. You also need to select the number of shares you want to apply for and the price band you are willing to pay. The minimum lot size for the IPO is 76 shares, and the price band is ₹187 to ₹197 per share. You can apply for the IPO in multiple lots, subject to the maximum limit of 13 lots per application. The total amount you need to pay for the IPO will depend on the number of shares you apply for and the cut-off price that will be decided after the bidding process.
• Submit the application form: After filling out the application form, you need to submit it and authorize the payment. If you are using UPI mode, you need to confirm the payment request from your UPI app within the specified time limit. If you are using ASBA mode, you need to ensure that your bank account has sufficient funds to block the amount until the allotment is done. If you are using non-ASBA mode, you need to ensure that your bank account has sufficient funds to debit the amount on the finalization of the basis of allotment.
• Wait for the allotment: The allotment of shares for the IPO will be done on a proportionate basis, depending on the demand and availability of shares in different categories. The allotment status will be announced within 15 days of the closure of the IPO. You can check the allotment status on the website of the registrar of the IPO, which is Link Intime India Private Limited, or on the website of the BSE or NSE.

How to Check Subscription Status of TVS Supply Chain IPO

The subscription status of the TVS Supply Chain IPO will indicate the level of interest and demand for the shares among different categories of investors.

The TVS Supply Chain IPO subscription status will be updated on a daily basis during the bidding period, which is from August 14, 2023, to August 18, 2023. You can check the subscription status on the website of BSE or NSE or on any of the online platforms that offer IPO services.

The TVS Supply Chain IPO subscription status will show the number of times each category of investors has applied for the shares, compared to the number of shares reserved for them. The categories of investors are:

• Qualified Institutional Buyers (QIBs): These include banks, financial institutions, mutual funds, insurance companies, foreign portfolio investors, and other eligible entities. They have 50% of the total shares reserved for them.
• Non-Institutional Investors (NIIs): These include corporate bodies, trusts, high-net-worth individuals, and other eligible entities. They have 15% of the total shares reserved for them.
• Retail Individual Investors (RIIs): These include individual investors who apply for shares worth up to ₹200,000. They have 35% of the total shares reserved for them.

The subscription status will also show the overall subscription level, which is calculated by dividing the total number of shares applied for by all categories of investors by the total number of shares offered in the IPO.

TVS Supply Chain IPO Grey Market Premium

The grey market premium (GMP) is an unofficial indicator of the expected listing price and performance of an IPO. It is calculated by subtracting the issue price from the price at which the shares are traded in the grey market before listing.

The grey market is an informal and unregulated platform where investors buy and sell IPO shares before they are listed on stock exchanges.

The GMP of an IPO can vary depending on various factors such as market sentiment, demand and supply, peer valuation, and company fundamentals. The GMP can also change frequently as new information and developments emerge.

As per some reports, the GMP of the TVS Supply Chain IPO is around ₹80 to ₹90 per share as of August 10, 2023. This implies that the shares are expected to list at a premium of around 40% to 45% over the upper end of the price band.

However, it is important to note that GMP is not an official or reliable indicator of the actual listing price or performance of an IPO. It is based on speculation and hearsay and can be influenced by manipulation and rumors.

Therefore, investors should not rely solely on GMP to make their investment decisions and should do their own research and analysis before applying for an IPO.

Reasons to Invest in TVS Supply Chain IPO

Investing in an IPO is a decision that requires careful analysis and evaluation of the company’s business, financials, growth prospects, valuation, and risks. The TVS Supply Chain IPO is no exception, as it has both advantages and disadvantages that need to be weighed before applying. Here are some possible reasons to invest in the TVS Supply Chain IPO:

• Strong growth potential: TVS SCS has shown consistent growth in its revenue and profitability over the years, and has several growth drivers that can help it expand its market share and profitability in the future. The company operates in a large and growing global supply chain management market, which is expected to reach USD 37.41 billion by 2027, registering a CAGR of 11.2% from 2020 to 2027. The company also has a diversified portfolio of services, customers, industries, and geographies, which gives it access to new markets and opportunities, as well as the ability to leverage economies of scale and best practices.
• Strong domain expertise and customer relationships: TVS SCS has over two decades of experience in providing supply chain solutions to various industries. The company has developed deep domain expertise and an understanding of customer requirements, which enables it to offer customized and innovative solutions. The company has also established long-term relationships with its customers, some of which span over 15 years. The company’s customer retention rate was 97.8% in Fiscal 2022.
• Technology and innovation: TVS SCS invests in technology and innovation to enhance its service delivery and operational efficiency. The company has developed proprietary platforms and solutions such as TVS Digi SCM, TVS Digi Freight, TVS Digi Spares, TVS Digi Warehousing, and TVS Digi TCFMS, which enable end-to-end visibility, control, and optimization of supply chain processes. The company also uses advanced technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), robotics process automation (RPA), and blockchain to improve its service quality and customer satisfaction.
• Attractive valuation: TVS SCS is offering its shares at a price band of ₹187 to ₹197 per share, which implies a price-to-earnings (P/E) ratio of 35.4x to 37.6x based on its annualized EPS of ₹5.28 for Fiscal 2022. This is lower than the average P/E ratio of its peers, which is around 40x. The company’s return on equity (ROE) improved from 9.64% in Fiscal 2020 to 15.67% in Fiscal 2022, which is higher than the average ROE of its peers, which is around 14%. The company’s debt-to-equity ratio reduced from 1.26 as of March 31, 2020, to 0.76 as of March 31, 2022, which indicates its improved financial position.
• Brand value and reputation: TVS SCS is a part of the TVS Group, which is one of India’s oldest and largest business conglomerates with interests in automotive, manufacturing, finance, education, and media. The TVS Group has a strong brand value and reputation in the Indian market, which gives TVS SCS an edge over its competitors. The company has also received several awards and recognitions for its excellence in supply chain management, such as the CII Scale Awards, the Frost & Sullivan India Logistics Excellence Awards, the India Cargo Awards, and the Express Logistics & Supply Chain Conclave Awards.

Reasons Not to Invest in TVS Supply Chain IPO

Here are some reasons not to Invest in TVS Supply Chain IPO:

• High competition and margin pressure: TVS SCS operates in a highly competitive and fragmented market, with both domestic and international players offering similar or complementary services. Some of the company’s key competitors are Mahindra Logistics Limited, TCI Express Limited, Blue Dart Express Limited, and Allcargo Logistics Limited. The competition may intensify further as new entrants or existing players expand their presence or capabilities. The competitive pressure may affect the company’s pricing power, market share, and margins.
• Dependence on key customers: TVS SCS derives a significant portion of its revenue from a few key customers across various industries. The company’s top five customers accounted for 32.9% of its total income in Fiscal 2022. The company’s top ten customers accounted for 45.6% of its total income in Fiscal 2022. The loss or reduction of business from any of these customers may adversely affect the company’s revenue and profitability.
• Regulatory risks: TVS SCS operates in multiple countries across different regions, which exposes it to various regulatory risks such as changes in tax laws, customs duties, environmental norms, labor laws, data protection laws, and other legal or administrative requirements. The company may also face regulatory challenges or disputes in relation to its contracts, licenses, permits, or approvals with various authorities or parties. Any non-compliance or adverse action by the regulators may result in penalties, fines, litigation, or loss of business opportunities for the company.
• Operational risks: TVS SCS is involved in various activities such as sourcing and procurement, transportation, warehousing, distribution, and logistics operations, which entail various operational risks such as accidents, delays, damages, losses, thefts, or claims arising from the handling or delivery of goods or services. The company may also face operational challenges or disruptions due to factors such as natural calamities, pandemics, strikes, lockouts, cyberattacks, or system failures. Any of these risks may affect the company’s service quality, customer satisfaction, reputation, and financial performance.
• Market risks: TVS SCS is subject to various market risks such as fluctuations in demand and supply, changes in customer preferences or behavior, technological changes or obsolescence, competition from new or existing players, or the emergence of new or alternative business models or solutions. The company may also face market risks due to macroeconomic factors such as inflation, interest rates, exchange rates, political instability, social unrest, or geopolitical tensions. Any of these risks may affect the company’s growth prospects, profitability, and valuation.

Final Thoughts on TVS Supply Chain IPO

To sum up, the TVS Supply Chain IPO is a promising opportunity for investors who are looking for a well-established, diversified, and innovative company in the logistics sector.

The company has shown strong growth in its revenue and profitability and has several growth drivers that can help it expand its market share and profitability in the future.

The company also has a strong brand value and reputation and offers its shares at an attractive valuation. However, the company also faces some challenges and risks such as high competition and margin pressure, dependence on key customers, regulatory risks, operational risks, and market risks.

Therefore, investors should do their own research and analysis before applying for the TVS Supply Chain IPO, and weigh the pros and cons carefully.

I hope this blog post has given you a comprehensive overview of the TVS Supply Chain IPO and how to apply for it. If you have any questions or feedback, please feel free to leave a comment below.

Thank you for reading and happy investing.