Contrary to the recent healthy listing trend, shares of TVS Supply Chain Solutions had a dismal debut on exchanges with a spread of just 4%.
The shares are currently trading at Rs 202.05, up just 2.5% from the issue price of Rs 197.
Due to the relatively low volume of registrations for this IPO recently compared to the high valuation, the listing has exceeded expectations.
Analysts say that although TVS Supply Chain Solutions is a leading supply chain management company, it operates in a highly competitive industry and has posted losses for the past two years.
“We advise investors to take profits after listing at such a high level,” said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart. Those who still want to hold should maintain their stop loss at the IPO price.”
Profitmart Securities’ Avinash Gorakshakar also advised investors to pull out as no fireworks are expected for the next 1-2 years.
TVS Supply Chain’s Rs 880 billion IPO has been registered 2.78 times. The issuance received bids for 69.9 million shares against the offering size of 25.1 million shares. The qualified institutional buyer (QIB) segment was booked 1.35 times, while the non-institutional investor (NII) segment was booked 2.35 times. The retail individual investor portfolio received a bid of 7.61 times the number of shares available to them. This issue is sold at a price of Rs 187-197 per share.
Supply Chain TVS is an Indian supply chain logistics solution provider networked across the value chain with cross-deployment capabilities. Its operating segments include integrated supply chain solutions (ISCS) and network solutions (NS).
Proceeds from the new issue will be used to pay off the debt of the company and its subsidiaries — TVS LI UK and TVS SCS Singapore — and for general corporate purposes.
In the year ended March 2023, the company posted sales of Rs 10,235 crore and a profit of Rs 41.76 crore.
JM Financial, Axis Capital, JPMorgan India, BNP Paribas, Edelweiss Financial Services and Equirus Capital act as the lead managers of the matter.