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TVS ILP raises Rs 1,300 crore through private InvIT to fuel growth
TVS InvIT issued units worth around Rs 2,000 crore, of which Rs 1,300 crore were subscribed by global and domestic investors. The offering comprised a fresh issue of Rs 1,050 crore and an offer for sale of Rs 250 crore by an existing unitholder.
'Logistics is a very asset-heavy and capital-intensive business. In the last five years, we have grown at a CAGR of about 32 percent. We aspire to keep that pace going, and if we need to maintain that momentum, we need capital. To raise capital, an InvIT is the most efficient way, and that's why we are doing this (listing),' said Ravi Swaminathan, founder and vice chairman of TVS ILP.
Investors like the International Finance Corporation (IFC), a member of the World Bank Group, and construction conglomerate Larsen & Toubro (L&T) have invested in the InvIT.
IFC has invested Rs 348 crore as the anchor investor in the initial listing of TVS InvIT. This is IFC's first equity investment in a warehousing InvIT in India.
'IFC has already been well-invested in transport and power infrastructure. We'd be glad to support and invest in more companies in this space. We are already very large investors in infrastructure, with roads and power transmission being a huge part of our business. Logistics is a strategic priority for us,' said Vikram Kumar, regional industry director for infrastructure and natural resources, Asia-Pacific, IFC.
The InvIT's strategic investor is L&T, along with 11 other investors, including pension funds, life insurance companies, and a few family offices.
Additionally, TVS ILP is part of the TVS Mobility Group and a joint venture between TVS Supply Chain Solutions (TVS SCS) and Swaminathan & family.
The InvIT has been seeded with approximately 11 million square feet (msf) of warehousing and industrial assets valued at around Rs 3,000 crore, drawn from TVS ILP's broader 20 msf platform. The portfolio spans logistics markets, including Chennai, Pune, Kolkata, Hosur, Kochi, and the Northeast, covering over 65 percent of India's consumption hubs.
Swaminathan stated that every year, 3 msf of revenue-generating assets are expected to be added to the InvIT's portfolio. 'Every million square feet will generate a revenue of Rs 35 crore. If we create 3 msf, we will be growing at the rate of over Rs 100 crore (of asset value) per year,' he added.
The TVS ILP InvIT has a tenant base of over 30 clients from sectors such as e-commerce, automotive, FMCG, electronics, pharmaceuticals, and manufacturing, with 100 percent occupancy.
Less than 50 percent of its rental income comes from its top 10 tenants. The Securities and Exchange Board of India (Sebi) has mandated that InvITs distribute at least 90 percent of their taxable income to the unitholders.
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