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The Rs 602-crore initial public offer (IPO) of Popular Vehicles and Services will hit the market on Tuesday, March 12. The issue, whose anchor booked opened today, will close on Thursday, March 14.
Popular Vehicles & Services is a Kuttukaran Group company, operating multi-brand automobile dealerships in Kerala, Tamil Nadu, and Karnataka. According to its website, it was among the top six dealerships in India, in terms of sales by volume, as of March 31, 2023, with respect to passenger and commercial vehicles dealerships.
It operated the fifth largest selling Maruti Suzuki dealership in India under the Arena network (by volume) and the eighth largest selling Maruti Suzuki dealership in India under the Nexa network (by volume) as of March 31, 2023.
Besides, it was ranked number one in the all India dealer ranking, in terms of volume of service, for Maruti Suzuki (Arena and Nexa) in the financial year 2023 (FY23).
Here's all you need to know about the offer:
Offer size:
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Popular Vehicles & Services IPO is a book built issue of Rs 601.55 crore. The issue is a combination of fresh issue of 8.5 million shares aggregating to Rs 250 crore, and offer for sale of 11.9 million shares aggregating to Rs 351.55 crore.
Offer dates:
The offer will open for subscription on March 12, 2024, and will close on March 14, 2024.
Price band:
Popular Vehicles & Services IPO price band is set at Rs 280 to Rs 295 per share.
Lot size:
The minimum lot size for an application is 50 shares, and in multiples thereof. As per Chittorgarh.com, the minimum amount of investment required by a retail investor is Rs 14,750.
Allotment and Listing date:
The allotment for IPO is expected around on Friday, March 15, 2024, while listing could be expected around Tuesday, March 19, 2024.
Grey market premium (GMP):
The GNO of Popular Vehicles and Services IPO stands at Rs 27 as on March 11, signalling a listing gain of 9 per cent at present.
Financials:
The company reported a 90.3 per cent year-on-year growth in net profit, to Rs 64.07 crore, for the financial year ending in March 2023 (FY23). It, however, was Rs 40.04 crore by September 2023 (H1FY24).
Its revenue from operations grew 40.65 per cent to Rs 4,875 crore Y-o-Y, while the Ebitda (earnings before interest, tax, depreciation, and amortisation) jumped 35.5 pecent to Rs 217.2 crore during the period. Profit margin was 1.3 per cent at the end of FY23.
Revenue for H1FY24 stood at Rs 2,835 crore with profit margin at 1.41 per cent.
Peer comparison:
As per reports, Popular Vehicles has return on net worth of 18.68 per cent, while its close listed competitor Landmark Cars has RONW of 18 per cent.
Landmark Cars current trailing 12-month price-to-earnings (P/E) ratio is 42.87x, as per TickerTape.
Risks:
1) The company has a significant dependence on its two OEMs namely Maruti Suzuki and Tata Motors (commercial).
2) The company is dependent on independent contractors and third-party customer service providers for ancillary services.
3) It is largely concentrated in southern India.
Watch: List of IPOs to watch out for this week
Watch: List of IPOs to watch out for this week
