TVS Supply Chain IPO booked 75% on day 2 so far, retail portion subscribed 2.66x

The Rs 880-crore initial public offering (IPO) of Concord Biotech continued to see mild response from the investors during the second day of the bidding process.

TVS Supply Chain Solutions is selling its shares in the range of Rs 187-197 apiece during the bidding process and investors can make a bid of a minimum of 76 equity shares and its multiples thereafter. The issue includes a fresh equity shares sale of Rs 600 crore, while a host of companies will offload shares worth Rs 280 crore.

According to the data, the investors made bids for 1,88,23,528 equity shares, or 75 per cent, compared to the 2,51,22,289 equity shares offered for the subscription by 12.15 pm on Friday, August 11, 2023. The issue will close for subscription on Monday, August 14.
 

The portion of retail investors was subscribed 2.66 times, while the allocation for non-institutional bidders fetched 79 per cent bids. The quota of qualified institutional bidders (QIBs) was subscribed merely eight per cent as of the same time.

The issue, which had opened for subscription on Thursday, August 10, was subscribed 55 per cent on day one.

TVS Supply Chain Solutions provides supply chain management services for international organizations, 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).

Brokerage firms have a mixed view on the issue. Select analysts have suggested a 'buy' for the issue citing its asset-light business model, strong parentage, and growth prospects. However, a few have suggested to clearly 'avoid' the issue citing its highly rich valuations, which look more expensive compared to peers.

The issue is richly valued, as it is higher than other industry players such as TCI Express, Delhivery, and Mahindra Logistics. Hence, we recommend an “Avoid” rating on the issue and would reconsider the company following sustained improvement in financial metrics (especially margin expansion) and reasonable valuation, said Stoxbox, formerly BP Equities, with a 'avoid' rating.

"The business is valued at an FY23 Post issue EV/EBITDA multiple of 13.0 times at the upper price band. The IPO looks fairly valued across various valuation parameters when compared with its close peers. Investors can SUBSCRIBE the issue for a long-term investment perspective," said SBI Securities.

Ahead of its IPO, TVS Supply Chain Solutions raised Rs 396 crore from 18 anchor investors by allocating 2.01 crore equity shares at an issue price of Rs 197 apiece, said a BSE circular.  The marquee anchor investors included  Authum Investment, Winro Commercial, Societe Generale, BNP Paribas Arbitrage, Copthall Mauritius, Aurigin Master Fund and various mutual funds.

TVS became profitable in FY23 is encouraging for investors. The organization can expect continuous growth in the years to come thanks to excellent internal technologies. Additionally, the company will concentrate on Tier 2 cities, which can boost market share and promote faster growth, said Arihant Capital Markets, with a 'subscribe' rating for the issue.

JM Financial, Axis Capital, JP Morgan India, BNP Paribas, Equirus Capital and Nuvama Wealth Management are the book-running lead managers to the issue, while Link Intime India has been appointed as the registrar to the issue. Shares of the company will be listed on both BSE and NSE.


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