BackTVS group stocks up 4-14% as family rejigs shareholding in conglomerate
The members of the TVS family have been managing the group's various entities that operate in diversified sectors ranging from automobiles to electronics and textiles
PremiumMUMBAI : Shares of TVS group companies rose 3.7-13.72% on Friday following news that members of the TVS family have agreed to rearrange their stakes so as to align and synchronise with the management of the respective firms.
Shares of TVS Electronics surged 13.7%, TVS Srichakra gained 11.3%, Sundaram Clayton rose 10.7%, and Sundaram Brake 3.72%. TVS Motor Co, however, was flat and Sundaram Finance down 0.75%.
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“With the passage of time, various members of the TVS family felt that the ownership of shares in various companies/ businesses should align and synchronize with the management of the respective companies, as is currently being done. Keeping this objective in mind, the members of the TVS family have today agreed to subscribe to the terms of a memorandum of family arrangement in order to record the terms of the family arrangement so agreed upon," TVS Motor Company Chairman and MD Venu Srinivasan said in a filing with the exchanges on Thursday.
The members of the TVS family have been managing the group's various entities that operate in diversified sectors ranging from automobiles to electronics and textiles.
The TVS group, consisting of over 50 companies, has a claimed turnover of $6.5 billion and employs over 39,000. The TVS group has interests in two-wheeler and automotive component manufacturing, automotive dealerships, distribution of automotive parts, financial services, logistics services, electronics, textiles and needles.
Listed group companies such as TVS Motor Co. Ltd, Sundaram-Clayton Ltd, Sundaram Fasteners Ltd, TVS Electronics Ltd and TVS Srichakra Ltd have assured that the new arrangement shall not affect the management and functioning of the firms. They do not see any royalty or brand usage payments from the respective operating businesses to the TVS family members and holding firms.
“This arrangement shall not affect the management and functioning of TVS Motor Company in any way, and we expect to continue business in ordinary course without impacting any of the stakeholders," Srinivasan added.
Stock exchange filings did not disclose the details of the changes in the promoter holding structure. While Sundaram-Clayton Ltd owns 57.40% in TVS Motor Co., promoter companies managed by family members own 75% in the former. They include promoters firms T V Sundaram Iyengar & Sons Ltd, Sundaram Industries Pvt Ltd, Southern Roadways Pvt Ltd and Sundaram Finance Holdings Ltd, which own 18.82%, 29.96%, 14.98% and 11.24% respectively in Sundaram-Clayton Ltd.
Senior nominated members of the TVS family shall now deliberate on how best to further implement this arrangement, the letter to the BSE stated that.
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