TVS Logistics Mops Up Rs 100cr PE Investment From Goldman Sachs

TVS Logistics Services Ltd (TVSL) has mopped up Rs 100 crore via private equity investment from Goldman Sachs to fuel its growth. This is the first time a private equity investment has been made in a TVS Group company. The funding will support the company to pass Rs 1,000-crore turnover by 2010, increase from Rs 338 crore in 2007-08. Goldman Sachs has infused a significant minority stake. The company likely to go in for an IPO, anytime after 18 months from now. The turnover of TVS group had crossed the $5-billion mark in 2007-08.

TVSL recently acquired a 50 per cent stake in the Mumbai-based Greenarches Ltd and renamed it TVS Infrastructure Ltd. This company will develop logistics parks by infusing about Rs 500 core through a special purpose vehicle. It owns about 20 acres in Pune and 10 acres in Chennai and plans to build up a land bank of about 200 acres in automotive hubs such as Gurgaon, Halol, Hosur, Indore, Lucknow, Singur and Uttranchal. TVSL recently formed 75:25 joint venture company, TVS Dynamic Global Freight Services Ltd, along with Dynamic Freight Forwarding Service.

TVSL Raises Rs 100 Cr Through PE

Chennai: TVS Logistics Services Ltd (TVSL) has raised Rs 100 crore through private equity investment from Goldman Sachs to fuel its growth. This is the first time a private equity investment has been made in a TVS Group company. The funding will support the company to notch a Rs 1,000-crore turnover by 2010, up from Rs 338 crore in 2007-08.

Addressing the media, the Chairman of TVSL, Suresh Krishna, said Goldman Sachs has invested a significant minority stake, which according to him may vary between 10-30 per cent. This funding was a fresh infusion and there was no dilution. The company may go in for an IPO, anytime after 18 months from now, he added.

Krishna said that the turnover of TVS group had crossed the $5-billion mark in 2007-08. To a question why TVSL went in for private equity without considering funding options from within the group, he said it was determined by market forces. Besides the growth rate of the group companies was high, with every company leveraging emerging opportunities, and thereby demanding more investments. In this situation the infusion of funds from the group into TVSL would be counter productive, he added.

On the advantages of funding from Goldman Sachs, the Operating Director of TVSL, R. Dinesh, said it would allow the company to leverage the contacts and reach of the private equity firm to help accelerate growth.

Recent ventures

TVSL recently took a 50 per cent stake in the Mumbai-based Greenarches Ltd and renamed it TVS Infrastructure Ltd, he said. This company would create logistics parks by investing about Rs 500 core through a special purpose vehicle. It owns about 20 acres in Pune and 10 acres in Chennai and plans to build up a land bank of about 200 acres in automotive hubs such as Gurgaon, Halol, Hosur, Indore, Lucknow, Singur and Uttranchal, he added.

TVSL recently formed 75:25 joint venture company, TVS Dynamic Global Freight Services Ltd, along with Dynamic Freight Forwarding Service, Dinesh, said. The turnover of the new entity would reach Rs 250 crore in three years. The company has also into entered commutation solutions for corporate staff transportation and plans to expand the fleet size from the current 200 buses to 1,000 buses in two years.

He said TVSL would enter finished goods transportation by establishing joint ventures with operators and through mergers and acquisitions. These joint ventures would contribute around Rs 100 crore during this fiscal, he added.