TVS group firms see share prices spike as family agrees on restructuring

CHENNAI: A day after the TVS Group decided to restructure its family holdings to synchronise the management of its various businesses, the share prices of most TVS group firms rose on Friday, from between 3.7 per cent to 13.72 per cent. Shares of companies such as TVS Srichakra,  TVS Electronics, and Sundaram Clayton were up by over 10 per cent. 

The century-old TVS group is currently worth around $8.5 billion and operates business in a wide range of sectors, from automobiles and auto components to finance and electronics. On Thursday, the Group had announced that the restructuring will see each family group get complete ownership of the businesses they manage, and  will also scrap the holding company.

There won’t be any cross holdings, the group said. The move is being seen as a wise measure by management experts as an effective way to avoid possible internal feuds. The group also said that pursuant to the family arrangement, the existing management of the group firms will continue. For example, Venu Srinivasan and his family will manage companies such as TVS Motor and Sundaram Clayton, while Suresh Krishna and his family will manage Sundaram Fasteners.

Besides, the TVS brand will be allotted to each family group for their use in their lines of business on a perpetual, royalty-free basis. Nominated family members will now decide on implementation. “The restructuring is an attempt to amicably resolve things and give space to each of the stakeholders to work towards growth without any interference, which is very crucial now as younger generation has begun playing an important role in many firms,” said an industry expert. 

Agreement irons out crossholdings

•  Each family group to get complete ownership of firms they manage 
•  The holding company will be scrapped under the arrangement
•  The restructuring will result in no cross-holdings across companies