TVS Supply Chain Solutions IPO: Should you subscribe to it? Here is what Anil Singhvi suggests
The proceeds from the TVS Supply Chain Solutions' IPO will be utilised for the prepayment or repayment of Rs 525 crore of all or a portion of certain outstanding borrowings availed by its company and subsidiary, TVS LI UK.
The subscription window for TVS Supply Chain Solutions' initial public offering (IPO) is open and will close on August 14. The company plans to raise Rs 600 crore by issuing 14,213,198 equity shares.
The proceeds from the IPO will be utilised for the prepayment or repayment of Rs 525 crore of all or a portion of certain outstanding borrowings availed by its company and subsidiary, TVS LI UK.
What does Anil Singhvi recommend?
Zee Business Managing Editor Anil Singhvi said that risk-bearing investors can apply for the IPO for the long term. According to him, one can buy now or once the shares get listed.
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While listing the pros, Singhvi said that the promoter's background is strong, as TVS has good brand value.
Further, he said TVS Supply Chain Solutions is India's largest logistics multi-national company, which gets 70 per cent of its business from the international market, which is a positive thing.
Another advantage to the company, according to Singhvi, is that it has an asset-light model as it outsources most of its manufacturing. Additionally, the cash flow is also good, the expert said.
Touching upon the risks or negatives, Singhvi said that as the company gets 70 per cent of its business from the global market, there is a huge risk involved.
Secondly, the margins of the company are low compared to its peers.
According to Singhvi, valuations are reasonable.
Apart from this, brokerage firm Reliance Securities has recommended subscribing to the TVS Supply Chain IPO.
"The issue is priced at 10.5 times based on its NAV of 18.89 as of March 31, 2023, and with good legacy parentage, a tech-enabled and process-driven solution company, and the retirement of debt from the IPO proceeds to improve net margins," the IPO note read.