TVS Supply Chain Solutions made a decent debut on the bourses today, August 23, 2023. The stock listed at ₹207.05 on the NSE, a 5.1 percent premium to the issue price of ₹197. Meanwhile, on the BSE, it listed at ₹206.30, a 4.7 percent premium.
The stock hit its day's high of ₹208.50, a premium of almost 6 percent to issue price. However, it settled just at ₹201, just at a 2 percent premium to IPO price.
“TVS Supply Chain Solutions made its debut on the stock markets today, listing at ₹207 per share, a 5 percent premium to its IPO price of ₹197. The company's IPO was subscribed to 2.85 times. Given that this IPO's subscription was lower than that of some recent IPOs, the listing is respectable—even above expectations. Although TVS Supply Chain Solutions is a leading supply chain management company, it operates in a highly competitive industry and has reported losses in the past two years. Additionally, the valuation of the IPO was also very high. We suggest investors book profits after listing at such a higher level. Those who still want to hold should maintain a stop loss at the IPO price,” recommended Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.
The ₹880 crore issue of TVS Supply Chain Solutions was open for subscription between August 10 and August 14 with a price range of ₹187-197. The issue consisted of a fresh equity share sale of ₹600 crore and an offer-for-sale (OFS) for 1.42 crore shares worth ₹280 crore.
This was the third IPO in August after SBFC Finance and Concord Biotech.
The public issue received a decent response from investors and was overall subscribed to 2.78 times in the 3 days of bidding. It saw bids for 6.99 crore equity shares against an offer size of 2.51 crore shares. The portion for qualified institutional bidders was subscribed to 1.35 times, while those for non-institutional investors and retail investors were booked 2.35 times and 7.61 times, respectively.
TVS Supply Chain Solutions provides supply chain management services for international organisations, government departments, and large and medium-sized businesses. It offers its services in two segments namely - integrated supply chain solutions (ISCS) and network solutions (NS). Its listed peers include TCI Express, Mahindra Logistics, Blue Dart, and Delhivery.
Net proceeds from the fresh issue will be utilised towards prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company and subsidiaries, TVS LI UK and TVS SCS Singapore; and general corporate purposes. Proceeds from the OFS will go to the selling shareholders of the company.
Brokerage firms were mixed on the issue. While some suggested subscribing to the issue due to its asset-light business model, strong parentage, and growth prospects; others recommended avoiding the issue on the back of its expensive valuations as compared to peers.