“We want to be a more global company today,” said Sudarshan Venu, in his first media interaction after taking over as the managing director of TVS Motor Company.
He expects 30% of the Indian scooter market to turn electric by 2025 and is betting on the company’s financial services business to play a key part in its future growth.
The 33-year-old is keen to put his mark on the South-based two-wheeler maker where he took over the reins last month from his father, chairman-emeritus Venu Srinivasan. “We are present in many (emerging) markets, but we seek to become a global company by having a significant business in developed markets,” he told ET.
TVS is India’s second biggest exporter of two- and three-wheelers, after Bajaj Auto. The company is growing faster than its rivals in the automotive business, but Venu has a new growth business also in his sights. TVS Credit Services, a financial services subsidiary, is being readied for further growth, as well as for enlisting strategic and financial investors.
In fiscal 2022, TVS Credit Services disbursed Rs 12,533 crore of loans, which grew 45% from the year before. Its assets under management rose to Rs 13,911 crore from Rs 11,200 crore, according to TVS Motor’s FY22 annual report.
Venu expects TVS Credit to close the ongoing fiscal 2023 with business of Rs 20,000 crore and wants it to double to Rs 40,000 crore in the next three to four years.
He said the endeavour would be to increase the “book size multi-fold” and that he was open to the “right kind of partners who are willing to work with us to create a much stronger financial services platform”.
The subsidiary’s income increased 22% to Rs 2,731 crore last fiscal year from Rs 2,241 crore in FY21, while profit before tax but after exceptional items grew at double the pace to Rs 151 crore from Rs 105 crore. It had gross non-performing assets of 5.1% and net NPA of 1.9% at the end of the fiscal year, with a provision coverage ratio of 51%.
“In our financial services business, TVS Credit Services, we are open for partnerships that help us achieve our growth, with a focus on consumer segment and digitalisation. We want to scale the business substantially — grow multi-fold in the coming years. Some potential partners are excited to be with us; we are keen to pursue this further to build a larger financial services platform,” Venu explained.
The financial services business has diversified well to ensure that three-fourths of its revenue now accrues from the non-captive business.
“I think digitalisation of finance represents a huge opportunity for TVS Credit and therefore I would like to embrace this and go in the digital direction to grow,” he said.
TVS Motor has invested Rs 1,461 crore in TVS Credit Services so far, including around Rs 100 crore in the last fiscal year. The only other subsidiary where it has made a larger investment is TVS Singapore at Rs 1,892 crore.
Venu’s global ambitions are being mentored by Ralf Speth, the former Jaguar Land Rover chief who is credited for scaling up the UK-based luxury carmaker for Tata Motors. Also at hand is his father Srinivasan. Speth has replaced Srinivasan as TVS chairman.
Venu is betting on a few acquisitions expecting those to pay off for TVS Motor and make its presence felt on the European roads and in other developed markets.
It had acquired UK’s Norton Motorcycles, a premium motorcycle company that was in disrepair, in 2020. Since then, Norton has seen some activity with new premium bikes and an electric bike expected to hit the market soon.
TVS also took over EGO Movement and Swiss E-Mobility Group or SMEG, a Swiss electric vehicle company. The two acquisitions and new product launches are expected to help TVS gain ground in Europe. These acquisitions will also pave way for it to quickly adopt new technologies and roll out electric vehicles in India.
Venu is also unfazed by the recent incidents of EV fire in India.
He said his company had been growing faster than the market. “We will continue to maintain robust growth as we go ahead, and we look to grasp the opportunities and pivot to electric vehicles. We expect 30% of the scooter market to be electric in 2025,” Venu added.
