TVS Motors , a leading two and three-wheeler manufacturer, has received approval from the National Company Law Tribunal (NCLT), Chennai Bench, for its Scheme of Arrangement to issue bonus preference shares to its equity shareholders. The scheme, which aims to reward shareholders by distributing surplus reserves, marks a significant move for the company.

Key Details of the Scheme

• Bonus Ratio: For every 1 equity share held, shareholders will receive 4 bonus preference shares.
• Face Value: Each preference share will have a face value of INR 10.00.
• Nature of Shares: 6% Cumulative Non-Convertible Redeemable Preference Shares (NCRPS).
• Record Date: Set for August 25, 2025, to determine eligible shareholders.
• Redemption Period: 12 months from the date of allotment.
• Listing: The preference shares will be listed on BSE and NSE.

Financial Implications

The company will utilize its general reserves and retained earnings to issue these bonus preference shares. As of December 31, 2023, TVS Motor's free reserves and retained earnings stood at INR 7,574.00 crore, which is sufficient to cover the redemption obligation of approximately INR 1,900.00 crore for the bonus preference shares.

Impact on Authorized Share Capital

Following the scheme's implementation, TVS Motor's authorized share capital will automatically increase to INR 2,050.00 crore, comprising:

• 50 crore equity shares of Re 1.00 each
• 200 crore preference shares of INR 10.00 each

Safeguards for Existing Debenture Holders

The company has assured that the scheme will not affect the existing Non-Convertible Debenture (NCD) holders. The terms and conditions of the NCDs, including coupon rate, tenure, and security, will remain unchanged. As of December 31, 2023, the outstanding amount towards NCDs stood at INR 125.00 crore.

Management's Perspective

The company stated, "The surplus reserves are well above the Company's current and likely future business needs. The Company has concluded that it can optimally utilize its surplus reserves by distributing a considerable portion of the same to its equity shareholders."

Next Steps

TVS Motor Company will now proceed with the implementation of the scheme, including setting the record date and issuing the bonus preference shares. The company will also make necessary filings with the Registrar of Companies for the increase in authorized share capital.

This move by TVS Motor Company demonstrates its commitment to enhancing shareholder value while maintaining a strong financial position for future growth. The issuance of bonus preference shares provides shareholders with a near-cash instrument while offering the company flexibility in managing its liquidity until redemption.

Investors and shareholders should note the upcoming record date and stay informed about further announcements from the company regarding the implementation of this scheme.

TVS Motors has kicked off the fiscal year with a stellar performance, achieving its highest-ever quarterly revenue and surpassing the ₹10,000 crore milestone for the first time. The company reported a robust 20% year-on-year growth in revenue, reaching ₹10,081.00 crores in Q1, compared to ₹8,376.00 crores in the same quarter last year.

Strong Financial Performance

The company's profit after tax (PAT) saw a significant increase of 35%, rising to ₹779.00 crores from ₹577.00 crores in the corresponding quarter of the previous year. Operating EBITDA grew by 32% to ₹1,263.00 crores, with the EBITDA margin improving to 12.5% from 11.5% in the previous year.

Sales Volume Growth

TVS Motors witnessed a 17% increase in overall sales volume during the quarter. The two-wheeler segment showed mixed performance, with domestic ICE (Internal Combustion Engine) sales growing by 8%, while international sales surged by 40%. The company's electric two-wheeler sales increased by 35% to 70,000 units, and three-wheeler sales jumped by 46% to 45,000 units.

Electric Vehicle (EV) Segment

The EV segment continues to be a strong focus area for TVS Motors. The company's flagship electric scooter, TVS iQube, has surpassed 6 lakh unit sales, maintaining its market leadership in India. TVS has expanded its iQube portfolio to include six variants, offering a wide range of options for EV customers.

International Market Performance

TVS Motors posted its highest-ever quarterly exports of 3.52 lakh units, driven by strong growth in major markets. The company witnessed a 40% growth in international sales, outpacing the industry growth of 23%. Markets in Africa are showing signs of stability, while the LATAM region continues to present growth opportunities for the company.

Three-Wheeler and EV Three-Wheeler Segment

The company's three-wheeler segment, including both ICE and EV models, showed robust growth. The recently launched TVS King EV Max, an electric three-wheeler, has received positive customer response. TVS Motors is expanding its three-wheeler network and currently covers about 70% of the market.

TVS Credit Services Performance

TVS Credit, the company's financial services subsidiary, reported a 30% growth in profit before tax (PBT) to ₹243.00 crores. The book size of TVS Credit has reached ₹26,900.00 crores, with the company focusing on risk-calibrated growth across product categories.

Future Outlook

Despite short-term challenges in the EV segment, particularly related to the supply of rare earth magnets, TVS Motors remains optimistic about its growth prospects. The company is exploring alternatives, including ferrite-based and magnet-free solutions, to ensure a resilient supply chain for its EV production.

K. N. Radhakrishnan, Director and Chief Executive Officer of TVS Motors, expressed confidence in the company's future performance, stating, "Our unwavering focus on customers, quality, and new product development, coupled with our strong brand portfolio, positions us well to continue growing ahead of the industry in both domestic and international markets."

As TVS Motors enters the festive season, it anticipates strong growth in both domestic and international markets across ICE and EV segments, leveraging its diverse product range and customer-centric approach.