Popular Vehicles IPO: A Detailed Look

The Initial Public Offering (IPO) of Popular Vehicles & Services Limited has generated significant interest within the Indian automotive sector. As a leading diversified automobile dealership, Popular Vehicles & Services operates a comprehensive business model, covering the entire vehicle ownership lifecycle. From the sale of new vehicles, servicing and repairs, to spare parts distribution, pre-owned vehicle sales, driving schools, and the facilitation of financial and insurance products, the company has established a robust presence. This article delves into the specifics of their IPO, including the crucial quota allocations, market lots, key dates, and a closer look at their financial standing.

Understanding the Popular Vehicles & Services Business Model

Popular Vehicles & Services categorises its operations into three primary segments: passenger vehicles (including luxury), commercial vehicles, and electric two- and three-wheeler vehicles. In Fiscal 2023, these segments contributed significantly to their revenue, with passenger vehicles leading the pack at ₹30,143.51 million, followed by commercial vehicles at ₹15,702.54 million, and electric two- and three-wheeler vehicles at ₹559.05 million. This diverse revenue stream highlights their broad market reach.

Their dealership network spans across major Original Equipment Manufacturers (OEMs) in India. For passenger vehicles, they represent Maruti Suzuki India Limited (both Arena and Nexa brands), Honda Cars India Limited, and Jaguar Land Rover India Limited. In the commercial vehicle space, they are associated with Tata Motors Limited and Daimler India Commercial Vehicles Private Limited (BharatBenz). Furthermore, their foray into the burgeoning electric vehicle market is evident through their dealerships for Piaggio Vehicles Private Limited (electric three-wheelers) and Ather Energy Private Limited (electric two-wheelers).

The company's strategic acquisitions have also played a vital role in its growth. Notable expansions include the acquisition of 11 service centres and 2 showrooms from a Maruti Suzuki dealer in Kerala in 2021, and the subsequent acquisition of 8 showrooms, 17 service centres, and 3 sales outlets of BharatBenz in Tamil Nadu and Maharashtra. This aggressive expansion in their service verticals has led to a substantial increase in revenue from servicing. In Fiscal 2023, revenue from servicing passenger vehicles reached ₹5,716.13 million, a notable jump from ₹3,651.64 million in Fiscal 2021. Similarly, commercial vehicle servicing revenue grew from ₹675.06 million in Fiscal 2021 to ₹1,418.65 million in Fiscal 2023. The company's commitment to excellence is further underscored by their ranking as ‘All India Highest in the Bodyshop Load’ for Maruti Suzuki in Fiscal 2023. The electric vehicle segment also shows promising growth, with sales increasing from 252 units in Fiscal 2022 to 3,381 units in Fiscal 2023.

IPO Details: Quotas, Pricing, and Dates

The Popular Vehicles & Services IPO is structured with a total issue size of approximately ₹601.55 Crores. This comprises a fresh issue of approximately ₹250 Crores and an Offer for Sale (OFS) of 11,917,075 equity shares. The face value per equity share is ₹2, and the price band has been set between ₹280 to ₹295 per share.

IPO Quota Allocation

The allocation of shares in an IPO is a critical aspect for investors, as it determines the proportion of shares reserved for different categories of bidders. For the Popular Vehicles & Services IPO, the quotas are as follows:

This allocation structure aims to balance participation from various investor classes, ensuring broad market interest and a well-distributed ownership base post-listing.

Key Dates and Listing Information

The IPO subscription period is scheduled from March 12, 2024, to March 14, 2024. Anchor investors were allotted shares on March 11, 2024. The basis of allotment is expected on March 15, 2024, with refunds processed on March 18, 2024. Equity shares are expected to be credited to demat accounts on March 18, 2024, and the IPO is slated to list on the BSE and NSE on March 19, 2024.

Market Lot and Application Process

Understanding the market lot is essential for investors planning their application. The minimum market lot for the Popular Vehicles & Services IPO is 50 shares, requiring an application amount of ₹14,750. Retail investors can apply for a maximum of 13 lots, which translates to 650 shares with an application amount of ₹191,750.

Lot Size Breakdown

Investors can apply for the IPO through their bank accounts via the ASBA facility or by downloading and submitting IPO forms from the NSE and BSE websites. The company's website ([https://www.popularmaruti.com/](https://www.popularmaruti.com/)) also provides valuable information.

Financial Performance and Valuation

A review of the company's financial reports provides crucial insights into its performance. Popular Vehicles & Services has demonstrated consistent revenue growth over the past few fiscals.

Financial Highlights (₹ in Crores)

The company's Profit After Tax (PAT) has shown a healthy upward trend, indicating strong profitability. For FY2023, the Earnings Per Share (EPS) stood at ₹10.22, with a Return on Net Worth (RoNW) of 18.68% and a Net Asset Value (NAV) of ₹54.69 per equity share. While the Price/Earning (P/E) ratio is not explicitly stated, these figures suggest a solid financial foundation.

Objects of the Issue

The primary objectives of this IPO are to strengthen the company's financial position and fund its growth initiatives. The proceeds from the issue are intended for:

• Repayment and/or pre-payment, in full or part, of certain borrowings availed by the company and certain of its subsidiaries, namely, VMPL, PAWL, PMMIL, KGPL, KCPL, and PMPL.
• General corporate purposes.

Key Stakeholders and Support

The IPO is managed by lead managers ICICI Securities Limited, Nuvama Wealth Management Limited, and Centrum Capital Limited. The registrar for the IPO is Link Intime India Private Ltd, a reputable entity in managing share allocations and investor services. The company's promoters include John K. Paul, Francis K. Paul, and Naveen Philip, who bring significant experience to the automotive retail sector.

Frequently Asked Questions (FAQs)

Q1: What is the IPO size of Popular Vehicles & Services?
The total IPO size is approximately ₹601.55 Crores.

Q2: What is the price band for the IPO?
The price band is set between ₹280 to ₹295 per equity share.

Q3: When is the IPO open and closing date?
The IPO opens on March 12, 2024, and closes on March 14, 2024.

Q4: What are the different investor quotas?
The quotas are 35% for Retail, 50% for QIB, and 15% for NII.

Q5: How can I check the allotment status?
Allotment status can be checked on the Link Intime India Private Ltd website after the basis of allotment is finalized.

Q6: What is the primary business of Popular Vehicles & Services?
They are a diversified automobile dealership involved in sales, servicing, spare parts, pre-owned vehicles, and driving schools.

Q7: What will the IPO proceeds be used for?
Proceeds will be used for repayment of borrowings and general corporate purposes.

Q8: What is the minimum application lot size?
The minimum market lot is 50 shares, with an application amount of ₹14,750.

Q9: Which OEMs does Popular Vehicles & Services represent?
They represent Maruti Suzuki, Honda, Jaguar Land Rover, Tata Motors, Daimler India Commercial Vehicles, Piaggio, and Ather Energy.

Q10: When is the expected listing date?
The expected listing date on BSE and NSE is March 19, 2024.

Conclusion

The Popular Vehicles & Services IPO presents an opportunity for investors to participate in a well-established player in India's automotive retail landscape. With a diversified business model, a strong network of dealerships, consistent financial performance, and strategic expansion plans, the company appears poised for continued growth. Understanding the IPO quotas, application process, and the company's fundamentals is crucial for making an informed investment decision.