T V Sundararam Iyengar and Sons, part of the business conglomerate TVS Group, has hived off its group firm MyTVS into a separate company through which it plans to make an investment of Rs 500 crore over the next three years.
The new entity -- TVS Automobile Solutions -- will have private equity investments of Rs 78 crore from the Mumbai- based Kitara Capital.
The company has acquired a minority stake of 30% in the new entity, according to TVS Automobile Solutions Director R Dinesh.
This is the second time there has been private equity participation in a TVS Group firm after TVS Logistics Services was hived off in 2008.
Speaking to reporters here about the newly formed company, Dinesh said through TVS Automobile Solutions, they would make investments of Rs 250 crore over the next three years, while an additional Rs 250 crore would be sought from joint ventures.
"We will require investments of Rs 250 crore. It will be raised by our company. The additional Rs 250 crore will be raised through our Joint Venture partners ...", Dinesh said.
He said they were "in talks" with three-four companies for entering into a joint venture and a deal is likely to be signed in the next "three to six months".
The Chennai-based firm currently has a strong presence in the Southern region and the investments through joint venture partners would help it to have a pan-India presence.
According to Dinesh, the JV would provide "infrastructure" facilities and "market access" where his company does not have a presence. The JV companies, he said, would make Rs 15 crore investments besides holding a "majority" stake.
He added they would initially focus on four states in the Northern and Western region and subsequently will expand to 11 states.
Talking about the company's overseas plans, he said they were already present in Sri Lanka and "are looking at Bangladesh and some Gulf Cooperation Council (GCC) countries".
Stating that the industry has huge potential and was growing at a rapid pace, he said they aimed to reach a turnover Rs 460 crore by 2014.
Currently, the company has a capital base of Rs 120 crore and has reported profits of Rs 33 crore.
