Overview of the Fundraising Campaign
A strategic fund raise by TS Rajam successors at TVS Mobility will be raising Rs 2,000 crore. This brazen money raise is intended to provide capital expenditure support to the company’s subsidiaries and fit into debt management of the existing debt base. Standard Chartered Bank will spearhead the fundraising while the balance is set to be provided by banks and credit funds.
Purpose of the Funds: Capital Expenditure and Debt Repayment
The funds garnered from this campaign are going to be, therefore, very foundational to the growth trajectory for TVS Mobility. Such goals include:
- Capital Expenditure: The infusion will empower various group businesses under TVS Mobility to expand operations, streamline processes, and enhance service capabilities. Investments will likely focus on logistics, vehicle dealerships, tire manufacturing, and the company’s online aftermarket platform, Ki Mobility, which specializes in auto parts and spares.
- Debt Management: A significant portion of the funds will also address existing debt obligations, especially loans previously acquired from Kotak Special Situations Fund. In 2021, TVS Mobility borrowed approximately Rs 1,000 crore from Kotak, and part of this fundraising will be directed toward repaying these dues.
Key Players and Stakeholders in the Fundraising Effort
TVS Mobility’s leadership, formed by TS Rajam’s descendants, plays an integral role in driving this campaign. The notable family members involved in TVS Mobility’s operations include:
- R Dinesh: Executive Chairperson of TVS Supply Chain Solutions
- R Haresh: Director at TVS Mobility Group
- Shobhana Ramachandran: Managing Director of TVS Srichakra
These leaders bring diverse expertise to the company, guiding it across various sectors such as supply chains, tire production, and auto dealerships.
Also Read: Hybrids and CNG Cars Lead India’s Market Shift, But EVs Set to Bet on New Models
Strategic Role of Standard Chartered Bank
Standard Chartered Bank is the anchor in this funding initiative, contributing to the credibility and visibility of the campaign. While the bank has declined to comment, its involvement likely brings in additional investors, particularly from the credit fund sector, to help achieve the targeted Rs 2,000 crore.
TVS Mobility’s Corporate Footprint and Financial Performance
TVS Mobility maintains a broad portfolio, holding a significant stake of 24.35% in the publicly listed TVS Supply Chain Solutions and a network of more than a dozen subsidiaries, associate companies, and joint ventures. In FY23, TVS Mobility recorded assets totaling Rs 5,604 crore and an income of Rs 9,293 crore, underscoring its robust financial position and growth potential.
Family Settlement and Business Realignment
In 2021, a landmark family settlement reshaped the governance of TV Sundaram Iyengar’s business empire. This settlement allocated specific businesses to each branch of the family, creating distinct managerial roles for TS Rajam’s successors in TVS Mobility while other family branches control Sundaram Finance, Sundram Fasteners, and TVS Motors. This realignment has allowed each branch to streamline its focus, ensuring clear leadership across the group’s varied holdings.
Key Business Areas of TVS Mobility
The following sectors are crucial to TVS Mobility’s operations, with a substantial part of the Rs 2,000 crore likely being channeled toward these business segments:
The following are the core business segments where a large portion of the Rs 2,000 crore of the TVS Mobility is likely to be spent in these:
- Supply Chain Solutions: This core business segment has the logistic and distribution activities in particular sectors of industries.
- Tire Manufacturing: Under the banner of TVS Srichakra, the organization has the highest quantity of tyres of all descriptions for both domestic and international markets.
- Vehicle Dealerships: The Company has a very strong chain of vehicle dealerships across India, meeting the ever-growing demand for automotive.
- Auto Parts and Aftermarket: Ki Mobility is an online aftermarket platform specialising in auto parts and services catering to the needs of the digitally savvy customer base.
Also Read: Tata Motors Reports Q2 Profit Decline Amid Weaker JLR Sales and Domestic Market Challenges
Future Financial Strategy and Growth Prospects
This fundraise, in current terms, reflects TVS Mobility’s efforts to sustain growth with an optimised debt structure. An official spokesperson said this initiative has nothing to do with TVS Supply Chain Solutions, though the capital raised is going to support other entities in the TVS Mobility network.
With the new strategy of TVS Mobility, expansion of its footprint across diversified industries will be open with a balance in financial approach. The entire campaign worth Rs 2,000 crore is a well-thought-out consolidation strategy on its existing strength lines and operate more effectively to finally be competitive in today’s volatile market landscape.
