Popular Vehicles and Services IPO to open on March 12; Sets issue price at ₹280-295 per share

6 Mar 2024 , 10:12 AM

Established in 1983, Popular Vehicles and Services Limited operates within the automotive dealership sector in India. The company offers comprehensive solutions across the entire spectrum of vehicle ownership, encompassing the sale of both new and preowned vehicles, servicing, distribution of spare parts, operation of driving schools, and facilitation of third-party financial and insurance product sales.

The company is coming up with an IPO; following are the details of Popular Vehicles and Services IPO:

1. Price Band and Dates: The price band for the IPO is set at ₹280-295 per share. The subscription will open on March 12 and close on March 14. The anchor bidding will open on March 11. The basis of allotment will be finalized on March 15, and refunds will be initiated on March 18. The stock is expected to be listed on exchanges on March 19.
2. IPO Size: The IPO comprises fresh shares worth ₹250 Crore by the company and an offer-for-sale (OFS) of 11.92 million shares by private equity fund BanyanTree Growth Capital II LLC. At the upper price band, the total IPO size is a little over ₹600 Crore, and the market capitalization stands at ₹1,450 Crore.
3. Promoter and Shareholding Structure: Promoters hold 69.45% of the company, with the remaining stake owned by public shareholders, including BanyanTree, which is the largest shareholder. Three promoters – John K Paul, Francis K Paul, and Naveen Philip – each own 23.15%.
4. Utilization of Funds: Popular Vehicles plans to utilize ₹192 Crore out of the net fresh issue to repay its own and certain subsidiaries’ debts, while the rest will be used for general corporate purposes. As of December 2023, the consolidated debt on its books was ₹637.06 Crore.
5. Financial Performance: The company recorded significant growth in net profit at ₹64.07 Crore for the financial year ended March FY23, representing a 90.3% year-on-year increase. Revenue from operations grew by 40.65% to ₹4,875 Crore. However, there was pressure on the operating margin, which fell to 4.45% from 4.6% in the previous year. The net profit for the six-month period ended September FY24 stood at ₹40 Crore on revenue of ₹2,835 Crore.
6. Business Segments: Popular Vehicles caters to various segments, including passenger vehicles (including luxury vehicles), commercial vehicles, and electric two-wheeler and three-wheeler vehicles. It operates dealerships for several well-known brands.
7. Merchant Bankers: ICICI Securities, Nuvama Wealth Management, and Centrum Capital are acting as the merchant bankers to the issue.