Kerala-based Popular Vehicles and Services plans entry in west, north

Kerala-based Popular Vehicles and Services, which is gearing up to become the only publicly-traded automobile retailer in India, has said it is planning to expand its footprint into major states like Maharashtra, Gujarat and also the National Capital Region (NCR).

The company said it will focus more on the services segment of the business rather than sales, going ahead.

It is coming up with an initial public offering (IPO) comprising fresh issuance of equity shares worth Rs 150 crore and an offer for sale (OFS) of 2.6 million shares by private equity major Banyan Tree. The date of the IPO is yet to be decided.

Banyan Tree, which had invested $10 million in Popular Vehicles in 2015, will be selling its 34.01 per cent stake through OFS, aiming to raise around Rs 800 crore.

In terms of sales, Popular is among the top five dealership groups in the country – catering to Maruti Suzuki, Tata Motors, Honda and JLR.

“Today, we are predominantly in Kerala, Tamil Nadu and Karnataka. Our immediate goal is to expand presence in other big passenger vehicle markets like Maharashtra, Gujarat and the NCR,” said Naveen Philip, one of the promoters and a non-executive director.

The other major passenger and commercial vehicle dealers in the country include Indus Motor, Sai Service, Kataria Automobiles, Navnit Motors, Competent Automobiles, VST Motors and Pebco Motors. Out of them, Sai Service was the only company that was listed in the stock exchanges, until it delisted in 2011.

“Across India, we are number two in terms of services and want to focus on this, going forward. We have approximately service turnover of around Rs 420 crore. Moreover, it is a non-cyclical business,” Philp added.

At present, it operates 59 showrooms, 99 sales outlets and booking offices, 83 authorised service centres, 29 retail outlets, and 25 warehouses across the three states.

The company had sold 34,897 passenger and commercial vehicles in 2020-21 and 39,465 in 2019-20, posting a 13 per cent fall in sales due to the pandemic. Despite this, it posted a profit after tax of Rs 32.5 crore in FY21, as compared to Rs 12.5 crore in FY20 and Rs 21.4 crore in FY19.