Everything you need to know about TVS Supply Chain Solutions Limited IPO – IPOs – Trading Q&A by Zerodha

Commencing operations in 1995 as TVS Logistics and incorporating in 2004 as a separate firm, TVS Provide chain options Restricted is a Globally working provide chain administration providers firm having 10,531 clients spanning throughout industries resembling automotive, industrial, shopper, and tech and tech infra like Daimler India Industrial Automobiles Pvt Ltd, Sony India Personal Restricted, Hyundai Motor India Restricted, Hero MotoCorp Restricted, Modicare Restricted, Ashok Leyland Restricted, Yamaha Motor India Personal Restricted and Torrot Electrical Europa throughout Fiscal 2022.

It’s India’s largest provide chain options supplier when it comes to consolidated income and it is usually amongst the highest three longstanding provide chain options suppliers in India when it comes to years of operations.

The corporate’s operations are primarily divided into two segments:

(i)built-in provide chain options (ISCS); and (ii) community options (NS)

ISCS: contains sourcing and procurement, built-in transportation, logistics operation facilities, in-plant logistics operations, completed items, aftermarket success, and provide chain consulting.

NS: World forwarding options (GFS), which entails managing end-to-end freight forwarding and distribution throughout ocean, air, and land, warehousing and at port storage and value-added providers, and time-critical last mile options (TCFMS) which entails closed-loop logistics and assist together with spares logistics, break-fix, refurbishment and engineering assist, and courier and consignment administration.

Within the international market, it’s key geographies outdoors of India, embrace the UK, Europe, Asia-Pacific and North America.

• Based on the Redseer report, The Indian logistics market presents a big addressable alternative, with direct spending on logistics of US$216 billion in Fiscal 2020 and US$180 billion in Fiscal 2021 as a result of COVID-19 pandemic and subsequently, recovered to succeed in US$205 billion in Fiscal 2022. The Indian logistics market is anticipated to develop to roughly US$385 billion by Fiscal 2027 at a CAGR of 13% from Fiscal 2022 to Fiscal 2027.

Out of this market alternative, the dimensions of the outsourced provide chain options market (excluding e-commerce) in Fiscal 2022 was US$ 7.5 to US$ 7.7 billion, which is anticipated to develop at a CAGR of 20-22% to roughly US$20 to US$21 billion by Fiscal 2027.

• The worldwide logistics market presents a big alternative for third-party logistics suppliers, with spending on logistics of US$11.3 trillion in 2021, and is anticipated to develop to roughly US$13.6 trillion by 2026 at a 6.7% CAGR from 2020- 2026 (estimated).

As well as, the COVID-19 pandemic has made corporations additional notice the complexity in provide chains, and consequently, the demand for finish‐to‐finish outsourcing continues to rise and organizations are more and more open to partaking third-party logistics suppliers to handle their logistics and provide chain necessities. Out of this chance, the dimensions of the worldwide third-party logistics market in 2021 was US$1.4 trillion and is anticipated to develop at a CAGR of 8.2% from 2020-2026 (estimated) to a dimension of US$1.7 trillion by 2026(Supply: Armstrong Report).

The Rs. 880 crores public provide of TVS Provide Chain Options Restricted contains recent fairness concern value 600 crores and OFS value 280 crores.

For extra info, you possibly can verify the IPO Prospectus filed by the corporate:

Margin strain attributable to improve in prices: The corporate could not be capable to cross on any improve in working prices to their clients and the shortcoming to manage such prices could adversely have an effect on the enterprise, monetary situation, outcomes of operations, and money flows.

Dependence on long-term contracts: Corporations sometimes enter into long-term agreements with their clients and if their key clients (Prime 10 who contribute 25% of the enterprise) don’t renew their agreements or broaden the scope of providers or if the long-term relationships get impaired or terminated the enterprise, monetary situation, outcomes of operations and money flows could possibly be adversely impacted.

Losses in final 3 years: The corporate incurred losses in Fiscals 2020, 2021, and 2022, and the nine-month interval ended December 31, 2021, and any comparable losses sooner or later could adversely have an effect on the enterprise, monetary situation, and money flows.

Seasonality in working outcomes: Given the worldwide nature of operations, seasonal tendencies or country-specific holidays together with the seasonal nature of a few of their clients’ companies may end result within the quarterly monetary outcomes fluctuating. For instance, throughout the Chinese language New 12 months interval in China and South- East Asia, the corporate is subjected to seasonal fluctuations in demand.