Company: Popular Vehicles and Services Limited
IPO size: ₹150 crore
Minimum bid: Not mentioned
Maximum bid: Not mentioned
Issue highlights
Offer of sale – 42,66,666 equity shares of ₹10 each
Fresh issue – Equity shares worth ₹150 crore
Issue type – Book built issue IPO
Listing at – NSE and BSE
Investor type or category: Allocation to QIB, NIB, and Retail
| Investor category | Quota | No. of shares | Amount |
| QIB | 50% | - | - |
| NIB | 15% | - | - |
| Retail | 35% | - | - |
IPO timeline
Start date – Not announced
End date – Not announced
Tentative Allotment Date – Not announced
Tentative Refund Credit – Not announced
Tentative Share Credit in Demat – Not announced
Listing Date – Not announced
Registrar information (RTA)
Registrar – Link Intime India Private Limited
Concerned person – Shanti Gopalkrishnan
Email – popularvehicles.ipo@linkintime.co.in
Contact – 022 4918 6200
Key highlights
- Popular Vehicles and Services Limited was founded in 1939 and incorporated in 1983
- It is one of India's leading diversified automotive retail dealerships. Its business activities include the sale of passenger vehicles (new and pre-owned), distribution of spare parts, and vehicle repairs and services.
- The company had filed the draft papers for its listing with the Securities and Exchange Board of India (SEBI) on 4th August 2021 to repay its debt.
- The company operates passenger dealerships for major automobile manufacturers in India, including Maruti Suzuki, Tata Motors, Honda, and Jaguar.
- The company got SEBI's approval for IPO on 4th October 2021.
Reasons for going public
- Pre-payment or repayment of borrowings, which includes working capital loans, availed by either the company itself or its subsidiaries such as PAPL, PMMPL and VMPL
- General corporate purposes
Company information
Founded in 1939 and incorporated on 5th July 1983, Popular Vehicles and Services is India's leading diversified automotive dealership. The company has its headquarters in Kerala and facilitates the sale of new and pre-owned vehicles (passenger and commercial) for various automobile manufacturers. It also enables the sale of third-party insurance products, distribution of spare parts, repair, and maintenance of vehicles.
Some major clients of the company include Maruti Suzuki India Limited, Honda Cars India Limited, Jaguar Land Rover India Limited, and Tata Motors Limited. The company is also looking to enter the two-wheeler and electric vehicles' dealership market. The strong framework and diversification of business verticals have helped the company increase its profitability and achieve a growth in total EBITDA from ₹142.47 crore in FY19 to ₹174.85 crore in FY21.
Popular Vehicles and Services filed its Draft Red Herring Prospectus (DRHP) with the SEBI on 4th August 2021 to raise finances to strengthen its working capital and repay the debt.
Top shareholders of the company are:
| Name of shareholder | Equity shares (%) |
| BanyanTree | 34.01 |
| John K. Paul | 21.93 |
| Francis K. Paul | 21.93 |
| Naveen Philip | 21.93 |
Below is the consolidated financial information of the company for the last three years:
| Particulars (₹ crore) | FY21 | FY20 | FY19 |
| Revenue from operations | 2,893.53 | 3,171.62 | 3,901.96 |
| Profit/(loss) of the year | 32.46 | 12.49 | 21.37 |
Strengths
- Strong capability to handle large volumes of dealerships and service centres, leading to business stability
- Expansive network of 59 showrooms, 99 sales outlets, 29 retail outlets, 83 service centres, and 25 warehouses across Kerala, Karnataka, and Tamil Nadu
- Prolonged industry experience and strong relationships with original equipment manufacturers (OEMs)
- Diversified business verticals contributing to the increased profit margins
- Excellent track record of customer retention
- Experienced promoters and management team
Risks
- Financial health of OEMs play a crucial role in the company's growth.
- The pandemic had an adverse impact on the automobile industry.
- Factors like labour unrest, riot, hike demand might harm the business.
- Massive competition in the sector through online and offline marketing.
- Any economic disturbances might affect the automobile industry directly.
Threats
- Ability to retain skilled labour while also keeping the expenses in check
- Ability to maintain inventory levels all the time
- Creating robust online and offline marketing strategies
- Solving legal procedures being faced by directors, promoters, and subsidiaries
Opportunities
- After a couple of dull years due to the pandemic, the automobile industry is witnessing a boom.
- Continuous expansion and diversification of portfolio is opening new gates for increasing profitability.
- The company is looking to enhance its digital presence to make its products and services more user-friendly and informative.
- Tapping into the electric vehicles' dealership market will open a new range of opportunities.
Conclusion
After a couple of dull years, the automobile industry is witnessing a boom, which is projected to help Popular Vehicles and Services increase their profit margins. Its planning to enter into the electric vehicles' dealerships may reap rich rewards in the future. However, intense competition and current financial instability may act as roadblocks.
If you are planning to apply for the Popular Vehicles and Services Limited IPO, read about the company's fundamentals, strengths, risks, and financials before making any decision.