Why TVS Supply Chain Solutions shares are rising for three sessions

Shares of TVS Supply Chain Solutions extended their gaining momentum for the third straight session on Wednesday amid value buying by investors after a recent fall in prices, post listing on the stock exchanges on August 23. The supply chain solutions company, a part of TVS Mobility Group, joined the domestic bourses after raising ₹880 crore via IPO route, which managed to garner a decent response from investors.

Early today, TVS Supply Chain Solutions shares opened a tad higher at ₹200 against the previous closing level of ₹199.95 on the BSE. During the first two hours of trade so far, the stock gained as much as 2% to hit a high of ₹203.95, while the market capitalisation rose to ₹8,875 crore.

At the current price level, TVS SCS shares trade 3.5% higher than IPO price of ₹197 per equity share. The smallcap stock touched its highest level of ₹208.50 on its listing day, while it slipped to the lowest mark of ₹193.95 on August 24, 2023.   

In an exchange filing on Tuesday, TVS SCS said that its founder and promoter R. Dinesh (executive vice chairman of the company) has been appointed as the executive chairman of the company by its board. S. Mahalingam has stepped down as chairman after completing his tenure of two terms as independent director, effective August 29, 2023, it said.

The board of the company has also onboarded two new additional independent directors – K. Ananth Krishnan and Narayan K. Seshadri. With these appointments, the new board will have 5 independent directors (the other 3 being Tarun Khanna, B. Sriram and Gauri Kumar). 

S. Ravichandran, non-executive director, has resigned from the board of the company to pursue his personal interests, the company said in the filing.

TVS SCS listed on the stock exchanges on August 23 after a successful IPO, which was booked 2.78 times. The quota reserved for QIBs was booked nearly 1.35 times, while the non-institutional investors (NIIs) category subscribed 2.35 times. The portion for retail investors managed to garner a good response from investors as the quota reserved for them attracted 7.6 times bid, as per the BSE data. The TVS Group company had reserved 75% of the issue for QIBs, 15% for NIIs, and the remaining 10% for retail investors.

The supply chain logistics solution provider’s IPO comprised an issue of fresh equity shares up to ₹600 crore and an offer for sale of 14,213,198 equity shares. The company, in consultation with the BRLMs, undertook a pre-IPO placement of 8,486,970 equity shares aggregating ₹150 crore on July 27, 2023, to several investors including SBI Life Insurance.

A day before its IPO opened for subscription, TVS Supply Chain Solutions raised around ₹396 crore from 18 anchor investors. The anchor book was fully subscribed as the company allotted 2,01,01522 equity shares at ₹197 per share.

The Chennai-based company intends to use more than half of its IPO proceeds raised from the fresh equity shares to repay loans and invest in its overseas operations. It also plans to use a part of the fund for the purpose of strategic acquisitions.

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