TVS Supply Chain Solutions Limited is India's largest and among the fastest growing integrated supply chain solutions provider among Indian listed supply chain solutions companies in terms of revenues and revenue growth, respectively, in Fiscal 2023. The Company is an India based multinational company and was promoted by the erstwhile TVS Group and is now part of the TVS Mobility Group. For more than 16 years, they have managed large and complex supply chains across multiple industries in India and select global markets through customized tech-enabled solutions. Company provides solutions and services to meet the customers' supply chain management and logistics requirements. As part of the engagement with customers, customers outsource portions of their supply chain to them in order to improve their efficiency and to better manage their resources. For instance, they provided purchase services, assembling of component and parts, kitting, and using of packing materials for a global wind turbine company. Company' solutions spanning the entire value chain from sourcing to consumption can be divided into two segments: (i) integrated supply chain solutions ('ISCS'); and (ii) network solutions ('NS'). The capabilities under the ISCS segment include sourcing and procurement, integrated transportation, logistics operation centers, in-plant logistics operations, finished goods, aftermarket fulfilment and supply chain consulting. The capabilities under the NS segment include 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. Globally, company provided supply chain solutions to 11,546, 10,531 and 8,788 customers during Fiscals 2021, 2022 and 2023, while in India, they provided the solutions to 1,120, 1,044 and 902 customers in the same years. They have added an aggregate of 1,179, 152 and 177 new customers (i.e. new customers who the Company did not provide any services in the immediately preceding year) in Fiscals 2021, 2022 and 2023, respectively. Moreover, (i) in Fiscal 2021, the global customers included 54 'Fortune Global 500 2020' companies, while the Indian customers included 24 'Fortune Global 500 2020' companies; (ii) in Fiscal 2022, the global customers included 61 'Fortune Global 500 2021' companies, while the Indian customers included 24 'Fortune Global 500 2021' companies; and (iii) in Fiscal 2023, the global customers included 72 'Fortune Global 500 2022' companies, while the Indian customers included 25 'Fortune Global 500 2022' companies. In addition, they added four 'Fortune Global 500 2020' companies in Fiscal 2021, 15 'Fortune Global 500 2021' companies in Fiscal 2022 and 16 'Fortune Global500 2022' companies in Fiscal 2023. The customers span across numerous industries such as automotive, industrial, consumer, tech and tech infra, railand utilities, and healthcare. They have developed long-term relationships with a number of the clients. Some of the customers with whom they have had long term relationships as of March 31, 2023 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), VARTA Micro battery Pte Ltd (7 years), Daimler India Commercial Vehicles Private Limited (12 years), Hero MotoCorp Limited (8 years), Modicare Limited (7 years), Panasonic Life Solutions India Private Limited (12 years), Dennis Eagle Limited (17 years), Electricity North West Limited (5 years), Yamaha Motor India Private Limited (7 years) and Torrot Electric Europa, S.A (3 years). Company operates an asset-light business wherein the warehouses (primarily comprising after market warehouses, dedicated consumer product and retail warehouses, multi-client facilities and national distribution centres) and vehicles are operated through leases with the network partners. While they do not have ownership of these assets, they have control over the capacity and fleet, and the scheduling, routing, storing, and delivery of goods are managed by them. Moreover, they also manage customer owned / leased warehouses. As per financial performance, TVS Supply Chain Solutions Limited has posted total income / net profits of Rs 6,999.69 Cr / Rs (73.34) Cr (FY21) and Rs 9,299.93 Cr / Rs (45.80) (FY22) and Rs 10,311.01 Cr / Rs 41.76 Cr (FY23). So as per previous financials data, company has shown average sales growth, but consistently posted losses except FY 23 and also company has high debt. Company has an average EPS of Rs (0.34) and average RoNW of (2.07)% for last three fiscals. Issue is priced at a P/BV of 10.43 as per NAV of 18.9 as on 31.03.23. If we attribute latest earnings of FY23 on fully diluted equity post issue, then asking price is at a P/E of around 206.34, which looks fully priced. As per RHP, peers comparison is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 47 IPOs in last three fiscals.JM Financial Limited : This is 30th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, 1 is trading below issue price and remaining are trading above issue price or at par. (As on 04.08.2023) Axis Capital Limited : This is 39th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 2 are trading below issue price and remaining are trading above issue price or at par. (As on 04.08.2023) J. P. Morgan India Private Limited : This is 10th IPO from this BRLM. From last 9 IPOs, 6 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 6 IPOs, 2 are trading below issue price and remaining are trading above issue price or at par. (As on 04.08.2023) BNP Paribas : This is 3rd IPO from this BRLM. From last 2 IPOs, 1 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 6 IPOs, all are trading above issue price or at par. (As on 04.08.2023) Nuvama Wealth Management Limited : This is 13th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 3 are trading below issue price and remaining are trading above issue price or at par. (As on 04.08.2023) Equirus Capital Private Limited : This is 12th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 1 is trading below issue price and remaining are trading above issue price or at par. (As on 04.08.2023) As per financials, TVS Supply Chain Solutions Limited has shown average sales growth, RoNW is 5.5% and P/E is 206.34 FY23 earnings, which looks aggressively priced. Also company has posted losses except FY23 and IPO money is used to repay debt and not for any kind of growth. Company is in business of supply chain solution with asset light model. This Complete sector has under-performed market in recent past and its highly fragmented and competitive. An IPO from TVS group after nearly 32 years, So we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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