Popular Vehicles & Services IPO: Review, Valuation, Date & GMP

Popular Vehicles and Services Limited IPO  - Complete Overview

Established in 1983, Popular Vehicles and Services Limited is a versatile automobile dealership in India.

The company offers a comprehensive range of services spanning the entire vehicle ownership lifecycle. From the sale of new vehicles to servicing, repairs, spare parts distribution, pre-owned vehicle sales and exchanges, driving schools, and the facilitation of third-party financial and insurance products, the company caters to every aspect of vehicle ownership.

The company's automobile dealership business is segmented into three key areas: 

1. Passenger vehicles including luxury vehicles.

2. Commercial vehicles.

3. Electric two-wheeler and three-wheeler vehicles. 

Operating through an extensive network comprising 61 showrooms, 133 sales outlets and booking offices, 32 pre-owned vehicle showrooms and outlets, 139 authorized service centres, 43 retail outlets, and 24 warehouses, Popular Vehicles and Services Limited has a strong presence across 14 districts in Kerala, 8 districts in Karnataka, 12 districts in Tamil Nadu, and 9 districts in Maharashtra.

In 2021, the company expanded its operations by acquiring 11 service centres and 2 showrooms from a Maruti Suzuki dealer in Kerala, as well as 8 showrooms, 17 service centres, and 3 sales outlets and booking offices of BharatBenz in Tamil Nadu and Maharashtra. Additionally, it has expanded its post-sale services and repair verticals over the past three fiscal years.

Popular Vehicles and Services Limited achieved recognition in Fiscal 2023 by being ranked 'All India Highest in the Bodyshop Load' for Maruti Suzuki. 

During the six months ending September 30, 2023, the company serviced a total of 419,729 passenger vehicles including 2,762 luxury vehicles, 103,116 commercial vehicles, 4,118 electric two-wheeler vehicles, and 883 electric three-wheeler vehicles through its network of 137 authorized service centres across its dealerships.

The company's profit after tax (PAT) increased from ₹324.55 million in Fiscal 2021 to ₹640.74 million in Fiscal 2023.

Popular Vehicles and Services Limited IPO Overview:

Popular Vehicles and Services Limited IPO date is slated to be open for subscription from March 12, 2024, to March 14, 2024. This IPO follows a Book Built Issue IPO.

Popular Vehicles and Services Limited IPO price is fixed at Rs.280 to Rs.295 per share. 

The total issue size of this IPO amounts to Rs.601.55 Cr. The company has reserved 35% for retail investors, 50% for institutional investors and 15% for non-institutional investors.
 

Company Financial

Compared to the previous fiscal year, Popular Vehicles and Services Limited has seen growth in total assets, net worth, and total revenue. While the profit after tax has shown an increase, there has also been a rise in total borrowings.

(Amount in crores)

Period	30 Sep 2023	31 Mar 2023	31 Mar 2022
Total Assets	1,941.78	1,503.78	1,263.29
Total Revenue	2,848.21	4,892.63	3,484.20
PAT	40.04	64.07	33.67
Net worth	384.21	343.04	279.89
Reserve & Surplus	371.67	330.50	267.34
Total Borrowings	764.61	505.01	371.91

Details of income generated from the sales of vehicles and services provided by the company

(Amount in millions)

Particulars	Six Months period ended, on September 30, 2023	FY 23	FY 22
Sales
Sale of new vehicle	19,411.07	33,305.06	23,222.61
Sale of new asseccories	439.42	771.22	433.59
Insurance Commission & Finance Commission	237.07	395.15	286.02
Income from schemes and incentives	701.34	1,049.48	956.26
Others	192.81	340.94	193.50
Services
Labour Income	1,605.17	2,871.91	2,367.73
Sales of spare parts	2,406.52	3,879.05	2,577.39
Insurance Commission	110.32	192.52	167.59
Income from schemes and incentives	60.88	114.04	91.46
Others	41.88	84.20	121.51

 

 

 

The Objective of the Issue

The Company proposes to utilise the Net Proceeds towards fulfilling the following objects:

1. Repayment and/or pre-payment, either in full or in part, of specific borrowings acquired by our company and certain subsidiaries, namely, PAWL, PMMIL, KGPL, KCPL, and PMPL, are among the intended uses of the funds. 

2. General corporate purposes.

Peers of Popular Vehicles and Services Limited IPO

Name of the Company	Face Value (₹)	EPS (₹)	P/E Ratio
Popular Vehicles and Services Limited	2	10.22	-
Landmark Cars Limited	5	21.74	34.84

 

Evaluation

The IPO is priced within the range of Rs.280 to Rs.295 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 10.22 from the last year, the resulting P/E ratio is 28.88x.

• Taking into account the weighted EPS of Rs 7.76 for the last three years, the P/E ratio amounts to 38.01x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 38.84x.

As a result, the IPO price range, with a P/E ratio ranging from 28.88x to 38.01x, seems fully priced in comparison to the industry average of 38.84x.

IPO's Strengths 

• Extensive experience in the automobile industry and strong partnerships with top OEMs.

• Successful market penetration is supported by creative marketing approaches.

• Comprehensive business model ensuring stability and improved margins.

• Demonstrated capability in recognizing and seizing both organic and inorganic growth prospects.

• Sustained history of profitable financial results and expanding growth trajectory.

• Seasoned promoters and management professionals.

 

 

IPO weaknesses 

• Non-renewal, termination, or any adverse material modifications to dealership agreements by the company's OEMs could significantly impact its business prospects.

• Approval from the Central Government for appointing John K. Paul as a Whole-time Director of the company is pending.

• The company has experienced negative cash flows in the past.

• Increasing competition among automotive dealerships, both online and offline, is putting pressure on the company's profit margins from vehicle sales and related businesses.

• There are ongoing legal proceedings involving the company, its subsidiaries, promoters, and directors.

• The company needs to obtain various licenses, regulatory permits, and approvals to establish and operate its dealerships.

IPO GMP Today

The Latest GMP of Popular Vehicles and Services Limited IPO is Rs.5.

 

Popular Vehicles and Services Limited IPO timetable (Tentative)

Popular Vehicles and Services Limited IPO is scheduled from March 12 to March 14, 2024, with allotment on March 15, refund initiation on March 18, and listing on March 19, 2024

Events	Date
IPO Opening Date	March 12, 2024
IPO Closing Date	March 14, 2024
IPO Allotment Date	March 15, 2024
Refund initiation	March 18, 2024
IPO Listing Date	March 19, 2024

Popular Vehicles and Services Limited IPO Details 

Popular Vehicles and Services Limited IPO, with a face value of Rs.2 per share, opens on March 12 and closes on March 14, 2024, offering 20,391,65 shares at Rs.280 to Rs.295 per share, with a lot size of 50 shares, aiming to raise Rs.601.55 Cr, and will be listed on BSE and NSE.

IPO opening & closing date	March 12, 2024 to March 14, 2024
Face value	₹2 per share
Issue Price	₹280 to ₹295 per share
Lot Size	50 Shares
Price of 1 lot	₹14,750
Issue Size	20,391,651 shares (aggregating up to ₹601.55 Cr)
Offer for sale	11,917,075 shares of ₹2 (aggregating up to ₹351.55 Cr)
Fresh issue	8,474,576 shares (aggregating up to ₹250.00 Cr)
Employee Discount	Rs 28 per share
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

Popular Vehicles and Services Limited IPO Lot Details 

For Popular Vehicles and Services Limited IPO, the retail investor invests in a minimum of 1 lot and a maximum of 13 lots (650 shares) at Rs.191,750 while for HNI investors, the minimum investment is 14 lots (700 shares) at Rs.206,500.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	13 lot
Minimum Lot Investment (HNI)	14 lot
Maximum Lot Investment (HNI)	67 lot

 

 

 

Popular Vehicles and Services Limited IPO Reservation

Institutional share Portion	50%
Non-institutional share Portion	15%
Retail share Portion	35%

Promoters and Management of Popular Vehicles and Services Limited

• John K. Paul

• Francis K. Paul

• Naveen Philip

Pre-issue Promoter shareholding	65.79%
Post-issue Promoter shareholding

 

Popular Vehicles and Services Limited IPO Lead Managers:

• ICICI Securities Limited

• Nuvama Wealth Management Limited

• Centrum Capital Limited
  
  

Dividend Policy

The company has not issued any dividends in the past financial years, and the potential for future dividend payments depends on the financial performance of the company.

 

 

Conclusion

The company holds a dominant position in its sector and enjoys a strategic partnership with Maruti, a top automobile company. With a widespread presence spanning over 400 touchpoints across four states in India, the company's footprint is substantial. Moreover, its financial performance is on an upward trend. After conducting a thorough analysis of all relevant factors, investors may consider applying for the upcoming IPO to potentially enjoy medium to long-term rewards.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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