Bengaluru and Mumbai: At the heart of the dispute in the Venu Srinivasan family is a fundamental question: did a restructuring of the TVS group leave the two siblings with unequal business inheritances?
Lakshmi Venu, 42 years old, who once ran the larger company by revenue, now heads an auto parts business that has struggled to grow, while her younger brother, Sudarshan Venu, 37, heads the holding company that controls TVS Motor Co. Ltd, India’s third-largest two-wheeler maker, and the group’s lending businesses.
The restructuring, over a series of decisions that started in 2022, shifted a valuable TVS Motor stake out of the business Lakshmi ran, leaving the siblings with very different assets and growth trajectories.
The division was not an equal split of the businesses as they stood before the restructuring, a Mint review of public filings and annual reports showed.
Sundaram-Clayton, then led by Lakshmi, owned 50.26% of TVS Motor and counted the automaker’s revenue and profits in its consolidated financials. The subsequent restructuring placed the TVS Motor stake under TVS Holdings Ltd, today led by Sudarshan, while the manufacturing business, including its US operations, remained with the reconstituted Sundaram-Clayton. The latter also carried substantial debt and did not receive proceeds from an earlier sale of TVS Motor shares. The changes took place before the family signed a memorandum of understanding () on control, non-compete obligations and brand usage in March 2024.
How the two businesses fared
The divergence has since become more pronounced. Sundaram-Clayton’s revenue was ₹2,026 crore in the year ended March, broadly unchanged from three years earlier, while its profit of ₹252 crore included a one-time gain of about ₹513 crore, largely from a Chennai land sale. Excluding that gain, the company would have reported a loss of ₹186 crore. Over the same three-year period, TVS Motor’s revenue rose 76% to ₹56,069 crore, while its profit more than doubled to ₹3,693 crore in the year ended March.
The contrast underscores how the two businesses have diverged since the restructuring. “The valuable asset from the old Sundaram-Clayton, which is the share in TVS Motor, was taken away. So, it was never really a fair split,” said a friend of the Srinivasan family, who also serves as an independent board member at a Chennai-based conglomerate.
The family dispute has escalated, with Venu Srinivasan’s wife, Mallika Srinivasan, challenging her husband’s assertion that all family matters have been settled. In earlier this week, she said no financial settlement had been reached within the family and asserted that their daughter, Lakshmi Venu, has the same rights as her brother, Sudarshan Venu.
Emails sent to Venu Srinivasan and Mallika Srinivasan seeking comment went unanswered.
The chronology of changes
In the first week of May 2022, the siblings took the top jobs at two connected companies. On 5 May, Sudarshan became managing director of TVS Motor. In the same week, elder sister Lakshmi took the same title at Sundaram-Clayton, the group’s auto parts maker. Both had earlier served as joint managing directors of the respective companies.
At the time, Lakshmi’s company was larger by revenue. Sundaram-Clayton manufactured aluminium components for vehicle makers and also owned 50.26% of TVS Motor. As a result, it included the automaker’s sales and profits in its consolidated financial statements.
In financial year 2022-23, Sundaram-Clayton reported revenue of ₹33,564 crore and profit of ₹1,333 crore. Almost all of this came from TVS Motor, which reported revenue of ₹31,974 crore and profit of ₹1,309 crore in the 12 months to 31 March that year. Sundaram-Clayton’s standalone auto parts business generated revenue of ₹2,074 crore and profit of ₹273 crore.
In effect, Lakshmi ran the holding company, while Sudarshan ran the operating company that generated most of its revenue and profit.
Series of changes
Over the next 15 months, the group underwent a series of changes. In September 2022, Sundaram-Clayton took full control of the group’s loss-making US factory by paying ₹317 crore to a TVS Motor subsidiary for the 50% stake it did not already own. In March 2023, it set aside ₹2,347 crore from its accumulated profits to issue shareholders a special class of shares carrying a fixed return. Much of that money had been generated by Sundaram-Clayton’s sale of about 7% of TVS Motor in two tranches during the year ended March 2022, which yielded ₹2,094 crore.
The restructuring followed. On 16 June 2023, TVS Holdings Pvt. Ltd, the family company that owned Sundaram-Clayton, was merged into it. On 17 July, Sundaram-Clayton was renamed TVS Holdings. A second family company, VS Investments Pvt. Ltd, was merged into it on 4 August. Finally, on 11 August, the auto parts business was transferred to a separate company, which took the Sundaram-Clayton name.
After the changes, TVS Holdings retained the stake in TVS Motor and, through it, the group’s lending business. A month later, in September 2023, Sudarshan became managing director of TVS Holdings. The company closed its small trading business in October 2024 and now holds investments.
The reconstituted Sundaram-Clayton, under Lakshmi, retained the manufacturing operations, including the US business. It also carried debt of ₹1,082 crore at the end of March 2023, which rose to ₹1,417 crore by the end of March 2024. Importantly, Sundaram-Clayton did not receive any proceeds from the TVS Motor share sale.
Brand-sharing agreement
On 20 March 2024, the family signed an agreement setting out management control of the two businesses. Sudarshan, together with his father, Venu Srinivasan, would control TVS Holdings and the businesses under it, including TVS Motor, TVS Credit and Home Credit. Lakshmi, also together with her father, would control Sundaram-Clayton.
The MoU, which covered non-compete clauses and brand usage, was disclosed to the stock exchanges by the three listed companies—TVS Holdings, and Sundaram-Clayton—on 22 March 2024. It didn’t have any further details on ownership, however. As the sole trustee of VS Trust, Venu Srinivasan controls 46.83% of Sundaram-Clayton and 66.55% of TVS Holdings.
An expert pointed to the relevant regulation under the Securities Exchange Board of India () rules. “Since mid-2023, Sebi has required promoters, promoter-group members, directors, key managerial personnel and certain other insiders to inform a listed company within two working days of any agreement they enter into, among themselves or with others, that directly, indirectly or potentially impacts its management or control, or imposes a restriction or liability on it. This applies even when the company isn’t a party, and covers later amendments too. The company must then disclose the agreement to the exchanges in a prescribed format,” said Sumit Agrawal, a partner at Regstreet Law Advisers and a former Sebi officer.
“A document described as a brand or non-compete arrangement can still fall within the rule if it bears on who controls the company,” Agrawal said. “Whether any particular disclosure was complete is ultimately for the company, the exchanges and Sebi to examine. The investor’s interest is simple: the market should know who controls a listed company, and on what terms.”
The business changes that preceded the March 2024 MoU have led at least one executive to describe the outcome as “a story of two inheritances that are not equal in size”.
“What is clear is that the sister who once ran the main company now runs the smaller business, while the brother runs the family’s most valuable asset,” the executive said. “The question is why Lakshmi agreed to the business changes even before the control agreement was signed.”