TVS Logistics Services Limited (TVS LSL), a 90% automotive logistics provider has acquired 100% stake in the Tata Group company, Drive India Enterprise Solutions Limited (DIESL) to tap the non automotive segments. Tata Opportunities Fund (TOF) will take a minority stake in TVS LSL by investing up to a maximum of Rs 250 crore, which will be utilised for funding the buy and for other operations as well. This acquisition provides new arena for TVS LSL to cater to untapped or hardly tapped non auto markets. The acquisition is subjected to requisite regulatory clearances including a go ahead sign from Competition commission of India (CCI).
The Managing Director of TVS LSL, R Dinesh said, “TVS LSL and DIESL both have complementary strengths and opportunities across sectors and geographies and this acquisition helps TVS LSL to diversify its business in non auto sectors and tap DIESL’s client base in consumer durables targeting domains like FMCG, retail, technology and telecommunications. Through our overseas acquisitions we have widened our service including last mile delivery, demand forecasting and technology logistics. As e-retail viruses the market the investment in logistics has become inevitable and this potential market could be grabbed with this acquisition as DIESL has a strong base in this segment.”
Managing Partner of TOF Padmanabh sinha added that, “The fund believes that the new Governement’s thrust on investing in infrastructure and reforming taxation especially the goods and service tax will be an invigorating lean-forward strategy and this ambiance 3rd party logistics (3PL) companies to offer world class solutions flagging win-win maneuvering move.”
K.R S Jamwal, Executive Director of Tata Industries and Director on the board of DIESL said, “ TVS and we share common values of trust and this partnership will be mutually rewarding. As Rs 950 crore DIESL focuses mainly on consumer durable segment and has more than 180 warehouses covering more than 6.5 million square feet, TVS LSL could delve deeply on the non auto segments and increase the radius of its footprint across globe with a suite of sophisticated capabilities and services.”
This helps TVS LSL to increase their export markets, which currently serves 50 countries and will also help to tap the ‘yet to reach’ North and East India. To culminate, this deal expects a revolution in logistics domain and a little more time for the clearances to be in place and rely to see the verses of dignitaries shape into realities.
