COMPANY LAW
| T.V. Sundram Iyengar and Sons floats new company Thu, 24 Feb 2011 |
| CHENNAI: T.V. Sundram Iyengar & Sons Ltd., the holding company of the TVS Group, has transferred all businesses done under the MyTVS brand to a newly-floated TVS Automobile Solutions Ltd. and also inducted private equity into the fresh venture. The move to make its independent multi-brand integrated car service solution business into a separate company is seen as a calculated strategy to quickly move into higher growth orbit in this opportunity-filled space. Muscat-based Kitara Capital has pumped in Rs.78 crore into TVS Automobile Solutions to pick up “a significant minority stake.” TVS Automobile is the second company in the TVS Group to receive funding from private equity. In 2008, TVS Logistics Services became the first company in the TVS Group to induct private equity. The new company has already gone functional with a funding of about Rs.120 crore. While Kitara has brought in Rs.78 crore, the balance has come from T.V. Sundram Iyengar & Sons. Kitara's investment has fetched it a board representation in the new company. R. Dinesh, Director, TVS Automobile Solutions, said that the focus of the company would be on growing with the customers. He said it would evolve strong partnerships with vehicle and part makers and become a bridge with the car owners. Mr. Dinesh said TVS Automobile was looking at a long-term perspective when it went in for a funding arrangement with Kitara Capital. “They (Kitara Capital) could be holding around 20-30 per cent equity by the year 2014,” he added. Sales from the MyTVS division were worth around Rs.33 crore at the moment. This would scale up to Rs.80 crore in 2012 and further to Rs.460 crore by 2014. The manpower too would have gone up to 4,500 by 2014 from the current 440, he added. Given these, Mr. Dinesh felt that TVS Automobile would require an investment of Rs.500 crore in the first phase. He was confident that a part of the funds needed for expansion could be met through internal resources. Close to Rs.250 crore could come via its proposed joint venture partners for its pan-India foray plan, he added. He said parleys were already on with three to four companies for entering into joint ventures. He expected these to fructify in the next ‘three-to-six months'. To a question, he said TVS Automobile would look at partnerships either to set up infrastructure facilities or gain market access. |
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