TVS Supply Chain Solutions IPO GMP (Grey Market Premium)

In the above case, the GMP trend shows that the grey market premium has opened at around ₹22, and now its down by  ₹3. Of course, we have to await for the actual subscription numbers to flow in after the issue opens for subscription on 10th June 2023, as that would have a very significant impact on the GMP. The 3 days of subscription will hold the key to the subscription levels and the GMP impact. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, TVS Supply Chain Solutions Ltd has shown good traction in the grey market.

If you consider the upper end of the price band of TVS Supply Chain Solutions Ltd at ₹197 as the indicative price, then the likely listing price is being signalled at around ₹219 per share as of the GMP indicator on 10th August 2023. One data point to track will be the subscription update on the stock as that would chart the GMP course from here. As mentioned, the institutional QIB subscription is a key trigger for the GMP pricing.

The GMP of ₹22 on a likely upper band pricing of ₹197 indicates a listing premium of a healthy 11.17% for TVS Supply Chain Solutions Ltd over the listing price. That pre-supposes a listing price of approximately ₹219 per share, when TVS Supply Chain Solutions Ltd lists on 23rd August 2023. Of course, these are approximations, so you must keep a margin of safety. However, that would depend on the GMP sustaining over the next few days after the issue opens.

GMP (grey market price) is an important indicator, albeit informal, of likely listing price. One cannot take this price at face value However, the GMP tends to be quite dynamic and changes direction with the flow of news and events. Investors must note here that this is just an informal indication and has no official acceptance. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers.

Brief on the business model of TVS Supply Chain Solutions Ltd

TVS Supply Chain Solutions (TVS SCS), is part of TVS Mobility Group (part of the reputed TVS group of South India). TVS SCS is among the largest and fastest growing integrated supply chain solutions provider in India and has been handling complex projects for a long time now. Over the years, the company has brought in its in-depth understanding of multi-sector dynamics and local markets, operational experience, corporate governance standards, and the implicit trust of stakeholders. It was TVS Supply Chain Solutions Ltd that pioneered outsourced logistics industry in India. They have managed complex value chains across sectors for more than 15 years. TVS Supply Chain Solutions Ltd has over 100 years of experience addressing supply chain challenges for global businesses; apart from government departments, and MSMEs through a fully integrated offerings. The company is just a formalization of the skills sets built and fine-tuned over the years.

Even within the gamut of supply chain solutions, TVC SCS provides Integrated Supply Chain Solutions, Global Forwarding and Last Mile Solutions that are customized to the needs of the customers. As of date, TVS Supply Chain Solutions employs over 18,000 logistics professionals, has more than 100 owned operating locations and services over 55 global Fortune 500 customers across different parts of the world. Some of the sectors to which they provide logistics solutions include Automotive, beverages, FMCG, defence, ecommerce healthcare, railways, telecom, utilities, technology, ITES, and financial services. Some of its blue chip customers include Babcock, Denso, Coca Cola, Daimler Trucks, Diageo, Ford, GM, Isuzu, Hagemeyer, Ministry of Defence, Siemens, and Volkswagen.

The proceeds of the public issue will be used for the repayment and prepayment of some of the outstanding borrowings of TVS Supply Chain Solutions Ltd and its subsidiaries located abroad. The issue will be lead managed by JM Financial, Axis Capital, JP Morgan, BNP Paribas, Equirus Capital and Nuvama Wealth. Link Intime India Private Ltd will be the registrar to the issue.