‘IPO to make us debt-free; brand to be more visible’

TVS Supply Chain Solutions (TVS SCS), part of the ~15,000-crore TVS Mobility Group and one of the largest companies under the TVS fold, is gearing up for an initial public offering (IPO). In an interview with Shine Jacob, company’s Managing Director RAVI VISWANATHAN talks about the IPO plans, family settlement, and growth in the logistics segment. Edited excerpts:

With the TVS family settlement, what are the positives that you are seeing with TVS SCS?

At TVS SCS, we are bullish about what we can do with the TVS family businesses. Already 3.3 per cent of our revenue globally comes from companies owned by TVS family members. That is also a growth opportunity. We will continue to pursue opportunities as before with other TVS companies. From the business perspective, I don’t see anything changing.

What changes will the IPO bring to the company?

I will look at it as a great opportunity. TVS family-promoted companies have been successfully listed for a long time in the market. TVS SCS will be the first TVS family member-promoted company to go for an IPO since 1994 (TVS Electronics). We are looking at raising a primary of around ~2,000 crore and post IPO, we will be a debt-free company. The IPO makes our brand even more visible and powerful and will help us in our business growth.

How do you see the growth of e-commerce and non-ecommerce segments in the logistic space?

We see opportunities in both the segments. We expect the ecommerce logistics business to grow by $6 billion in the next four years (in India). However, the non-ecommerce supply chain is set to grow by $12 billion during the same period. Therefore, the size of the opportunity at the non-e-commerce supply chain is large. In the e-commerce supply chain, we participate in the B2B side of the business. We have a presence in the fulfilment side (B2B), but not in the B-to-c delivery side.

Still the auto sector contributes 42 per cent to your market share in India. Are you worried about the ups and downs in the sector?

When we started, 100 per cent of our business was from the automobile sector. Today, we have a highly diversified portfolio. Globally, 24 per cent of our business comes from automobiles, 26 per cent from industrial, 17.5 per cent comes from technology, and 12.5 per cent from consumer durables. We have expanded into network rail and utility as well. It shows that we have significantly grown in the non-automobile segment and have diversified sectorally. We have the capability and technology that can easily be adopted to multiple segments. It is a conscious choice to be a company with the ability to provide end-to-end supply chain solutions across multiple sectors.

We continue to see the growth in our core sectors that include, auto, industrial, consumer durables, retail, and technology. We have also diversified into adjacent sectors, such as rail, utilities, defence, and beverages, and continue to look at emerging sectors like electric vehicles, clean energy, and health-tech. Thanks to our exposure to both the production supply chain and aftermarket business in the auto sector, we are not worried about the ups and downs.

What are the advantages of having global investors like Exor and Gateway?

Having an international investor like Exor or Gateway increases the confidence in the market because of the strong governance. That is what customers also look at. While companies, such as TVS SCS, are known for strong governance, such partners strengthen it further.

“WE WILL CONTINUE TO PURSUE OPPORTUNITIES AS BEFORE WITH OTHER TVS COMPANIES. FROM A BUSINESS PERSPECTIVE, I DON’T SEE ANYTHING CHANGING OWING TO THE TVS FAMILY SETTLEMENT”