4th generation TVS scion Dinesh has grown sales 15-fold, plans to reach $1 bn milestone in just 7 yrs

The TVS Group, more than a century old, is widely regarded as an emblem of the conservative South Indian business house where caution is preferred over soaring ambition. The exception to the rule is R Dinesh, 46, one of the scions of the TVS family who runs the logistics arm.

In just seven years he has grown sales at TVS Logistics 15-fold, bought a clutch of foreign companies and thrown open his own to PE investors such as Goldman Sachs. In the next few years, he wants TVS Logistics to grow faster - at an annual rate of 50% so that it reaches the milestone of $1 billion in sales by 2015.

Comparatively, it took Infosys 23 years to clock $1 billion in sales and 24 years for Wipro. TVS Logistics, however, had the advantage of being close to Rs 100 crore in revenue in 2004-05 when it was hived off into a separate entity. Dinesh, a chartered accountant who belongs to the fourth generation of the TVS family founded by TV Sundram Iyengar, plays down the point about high growth, attributing it to the nature of the business.

But the TVS Logistics growth story is significant within the group, having come at a time when marquee names such as TVS Motor run by Venu Srinivasan, his father's cousin, are having a tough time in the market. With such rate of growth, the logistics business could overtake Sundram Fasteners, run by another of his father's cousins Suresh Krishna, in just one more year. The plan now is to go for an IPO after 2014, the first for a group company in many years.

Including TVS Logistics, Dinesh manages group companies that together have a turnover of $1.4 billion, more than a fifth of the group's revenues. He is also the joint managing director of parent company TVS & Sons as also the director of TVS Automotive Solutions.

The numbers aren't the only reason he has made an impression both on those inside and outside the group. Venu Srinivasan's brother Gopal Srinivasan, belonging to the third generation of the family and who runs TVS Capital, recalls a discussion in 2007.

"I remember there was lot of debate and hesitation among TVS family members in tapping private equity investors for the first time. It was Dinesh who convinced them with his excellent presentation on the business model," he says.

Dinesh has until now managed to attract Rs 178 crore for his companies from investors such as Goldman Sachs and Kitara Capital. TVS Capital, too, is an investor.

Also, he has been the most active TVS family member in overseas buys of late. Under Dinesh, the group has done at least four overseas acquisitions in just three years, including last week's Rs 100-crore purchase of commercial vehicles parts distributor Universal Components.

"It is amazing to see a TVS family member from Madurai transforming himself to become a global player in the new business," says Gopal Srinivasan. Back home, he has forged a tie-up with the GMR family for the airport logistics business.

The growth of the Dinesh-run companies has been inconspicuous. The growth of TVS Motor and Sundram Fasteners in the 1990s and 2000s, in contrast, were far easily noticeable. To start with, they were listed companies. There were other reasons too. TVS Motor had a high-profile JV partner, Suzuki.


And it was serving a consumer-facing industry, meaning high visibility through advertisements and brand ambassadors such as Sachin Tendulkar and Mahendra Singh Dhoni. Sundram Fasteners, though not that high profile, grabbed attention for consistently getting the best supplier award from General Motors as well as being one of the first Indian companies to set up shop in China.

The TVS Group's strengths are primarily in the auto and finance sectors. Four sons of Sundram Iyengar became entrenched in his business and the four branches seen today are a result of that. It was in 2004 that the families that make the TVS Group saw a rare opportunity to build the logistics business together. A decade before that, a bitter turf war took place between family heads. They did patch up eventually. The logistics business was a sort of a signal that all's well. Dinesh, with whom everyone could relate to, took charge.

K Ramakrishnan, Executive Director and head of investment banking at Spark Capital Advisors, has known Dinesh for 25 years, from their days as schoolboys in the southern city of Madurai. He says Dinesh is able to bring people together with his "moderate, pious and balanced approach".

The company started with supply chain management in the auto aftermarket segment using the group's long experience in distributing parts. Later, it added production logistics which include in-bound logistics and plant warehouse management.

Since then, the dependence on the TVS group company for business has come down to 28% from 45%.

VG Ramakrishnan, Frost & Sullivan's vice president for the transportation and automotive sector, pegs the total logistics market in India at over $88 billion, of which third-party logistics account for 5-6%. TVS Logistics, he says, "has the advantage of its high focus on the automotive sector".

The big push for the logistics business happened in 2009 when the company bought Multipart Holding, among the top after-market logistics companies in the UK. In 2011, it built up its base in the US. Overseas, it is now present in the US, the UK, Spain, Germany and Thailand. Dinesh says TVS Logistics does not try to change culture overnight at the overseas companies which it has acquired.