Kotak Special Situations Fund (KSSF), alternative investment arm of Kotak Investment Advisors Ltd (KIAL), has invested Rs 1,000 crore ($130 million) in homegrown logistics firm TVS Supply Chain Solutions.
The investment will be done in partnership with the TVS promoters R. Dinesh (managing director of the TVS Supply Chain Solutions) along with his family and associate firms.
With this transaction, KSSF has invested 65% of its $1 billion (around Rs 7,130 crore) fund, closing its 9th deal from the fund.
"Under the transaction, KSSF has financed TS Rajam Rubbers Private Ltd with Rs 800 crore in the form of non-convertible debentures (NCDs) to help the promoter, R Dinesh acquire CDPQ’s stake in TVS SCS. The investments will help the TVS family consolidate their holdings in TVS SCS. Additionally, KSSF has invested Rs 200 crore in the form of equity in TVS SCS," Kotak said in a statement.
This deal will enable the founder family to provide an exit to CDPQ and prepare the company for an initial public offering (IPO), Srini Sriniwasan, managing director at KIAL, said, while announcing the deal.
Last month, VCCircle reported that TVS Supply Chain Solutions Ltd’s biggest private equity backer, Caisse de dépôt et placement du Québec or CDPQ, was in talks to exit the logistics firm.
This comes almost five years after CDPQ invested $161 million (Rs 1,000 crore) in the TVS Group subsidiary in 2016 by partially buying out Goldman Sachs and KKR & Co for a 38.17% stake.
The logistics firm has attracted a slew of investors. In November 2020, Japan’s Mitsubishi acquired a minority stake. Earlier in March that year, Gateway Partners bought shares in the second largest private equity investment in TVS Supply Chain after CDPQ’s.
Tata Opportunities Fund also owns a minority stake in the company, which reported net sales of Rs 6,604 crore and a loss of Rs 248 crore for the financial year ended 2019-20, according to VCCEdge, the data intelligence platform.
Financials for 2020-21 could not be ascertained.
TVS Supply Chain started as a business unit of TV Sundram Iyengar & Sons Ltd in 1995.
In 2004, it was established as a separate company, TVS Logistics Services Ltd, and renamed as TVS Supply Chain 15 years later.
Kotak Special Situations Fund
KSSF hit the final close of its $1 billion fund in August 2019. The fund focuses on special situations, credit and distressed spaces in India. In January 2020, it struck its debut deal.
Among the recent exits, the fund is likely to have made multiplied its returns on its year-old investment in cement firm Nuvoco Vistas Corp Ltd’s IPO.
In May, KSSF had announced its eighth deal to acquire 74% stake in stressed HKR Roadways owned by a consortium led by Gayatri Group.
Earlier this year, the fund had struck a deal to invest in a nutraceuticals business backed by Sanjaya Mariwala family.