TVS Finance - Excellent Investment

TVS Finance: Embracing Temasek

BSE 532319; Rs 16.75

Closed door parleys have been concluded between the TVS group owned TVS Finance and the Government of Singapore clone Temasek, which will allow the entry of the latter as a strategic investor into the company. Temasek-is the investment arm of the Government of Singapore that manages close to $ 100 bn and has made substantial investments in the Indian financial services and infrastructure segments over the past 5 years.

The fact that TVS Finance is owned to the tune of 89.77 per cent by TVS Motors (39.74 per cent), TVS Electronics (35.84 per cent) and TVS Investments (14.17 per cent) makes the entry of a financial investor into the corporate an easier task.

TVS has a large Equity of Rs 41 crore, in addition to Rs 70 crore of Preference Capital. The fall in commercial lending rates and better access to credit offered by Banks has taken away the bread and butter business of NBFCs. Temaseks fund infusion will thus allow TVS Finance to grow once more, cleaning the red on its books .

Background

TVS-FS commenced operations in 1982 as Harita Finance. It was the brainchild of Mr.T.S.Srinivasan, the youngest son of T.V.Sundaram Iyengar, the founder of the TVS group of Companies. Starting off as a player in the corporate finance market, TVS-FS built a large and loyal base of customers who invested vast amounts in the Company’s debt instruments.

Within a decade of its existence, the Company created a very formidable ‘brand’ of personalized service in the non-banking finance sector, which other companies could only aspire to match.

With spreads in corporate financing falling rapidly in the late 1990s, the Company was in the throes of change. Continuously reinventing itself in an industry that has gone through turmoil several times in the past, TVS-FS has emerged as a dominant player in retail financing, particularly two-wheeler finance for TVS Motor vehicles.

By penetrating deep into the pockets of the Southern States, the Company has made financing options available in areas that were hitherto untapped by players in the industry. With a slew of products to come in the retail financing space, TVS-FS is all set to rewrite the rules of the game, yet again.

At TVS-FS, continuous innovation and value-addition to customers, is a way of life. Trust forms the base of any relationship. And, at TVS-FS, building sound working relationships has been the primary focus. The corporation believes that the customer’s needs are better met when an entity makes an attempt to understand those needs. This allows greater flexibility through diverse offerings.


(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)