Popular Vehicle and Services IPO receives tepid response, issue booked only 37% on day 2

The Popular Vehicles and Services IPO continued to get a lukewarm response from investors on the second day of bidding on Wednesday. The initial public offer was subscribed only 37% till 11:05 am on March 13.

The multi-brand car dealership company received bids for 53.12 lakh shares as against 1,44,15,110 shares on offer, according to the NSE data.

The portion reserved for employees was the only segment to get a full subscription. It was subscribed over 5 times till the latest updates. Eligible employees submitted bids for 2.1 lakh shares as against 39,682 shares reserved for the category, as per the NSE data.

Also Read: Five things to know about Popular Vehicles and Services IPO

The retail portion of the IPO was booked 64%. The company received bids for 46,64,700 shares compared to 72,83,477 shares set aside for the category.

The non-institutional investors’ (NIIs) segment also saw a poor demand with bids for only 4.55 lakh shares as against 31.21 lakh equity shares on offer. The NIIs portion was booked only 15% on the second day of subscription till 11:05 am. The qualified institutional buyers’ (QIBs) segment received bids for only 4,100 shares compared to 39.7 lakh shares reserved for the category.

On the first day of subscription, on March 12, Popular Vehicles and Services IPO was subscribed only 27%. Barring employees of the company, investors remained cold towards the IPO. While the employee section managed to get nearly 4 times subscriptions, retail and NII portions were booked 47% and 11% times at the end of bidding on day 1.

Popular Vehicle and Services IPO date, price band and other key details

The price band of the Popular Vehicles and Services IPO has been fixed at ₹280-295 per share. The IPO lot size is 50 shares, amounting to a minimum investment of ₹14,750 for retail investors. The investors can bid for at least a single lot and in multiples thereafter.

The Popular Vehicles and Services IPO is a 100% book-built issue of ₹601.55 crore. The total issue size is of over 2 crore shares of face value of ₹2 each.

The IPO is a combination of a fresh issuance of 85 lakh shares aggregating to around ₹250 crore and an offer-for-sale (OFS) of 1.19 crore shares aggregating to ₹351.55 crore.

Not more than 50% of the net issue has been reserved for qualified institutional buyers (QIBs), with 35% kept for retail investors and 15% for non-institutional investors (NIIs).

Proceeds from the fresh issue of shares will be utilised by Popular Vehicles and Services for repayment and/or pre-payment, in full or part, of certain borrowings availed by the company and some of its subsidiaries. A part of the proceeds would also be used for general corporate purposes.

The Popular Vehicles and Services IPO would remain open for subscription between March 12 and March 14. The IPO share allotment is likely to be finalised on Friday, March 15.

The company is expected to transfer the shares to the Demat accounts of the successful bidders by Monday, March 18. The listing of the Popular Vehicles and Services stock on BSE and NSE is expected on Tuesday, March 19.

ICICI Securities Ltd, Nuvama Wealth Management Ltd and Centrum Capital Ltd are the book-running lead managers of the issue, while Link Intime India Pvt. Ltd has been appointed as the registrar.

About Popular Vehicles and Services

Popular Vehicles and Services Ltd belongs to the Kuttukaran Group. It is a diversified automobile dealership in India having a fully integrated business model. It caters to the complete life cycle of vehicle ownership from the sale of new vehicles, servicing and repairing vehicles to distributing spare parts and accessories. The company also facilitates the sale and exchange of pre-owned vehicles, and operates driving schools.

The company manages its automobile dealership business in three key segments – passenger vehicles including luxury vehicles, commercial vehicles and electric two-wheelers and three-wheelers.

As of 31 December 2023, Popular Vehicles and Services operated through its network of 61 showrooms, 133 sales outlets and booking offices, 32 pre-owned vehicle showrooms, 139 authorised service centres, 43 retail outlets and 24 warehouses. Popular Vehicles and Services posted revenue of ₹4,875 crore in FY23 compared with ₹3,465.8 crore in FY22. In the six months ended September 2023, the company saw revenue of ₹2,835 crore.

Its profit after tax (PAT) grew from ₹33.7 crore in FY22 to ₹64.1 crore in FY23. For the six-month period ended September 2023, the company’s PAT stood at ₹40 crore.

To know more about IPOs listing, schedule and upcoming IPOs, click here