Popular Vehicles IPO: Unveiling the Details for Potential Investors

Popular Vehicles and Services Ltd., a leading automobile dealership chain in Kerala, India, is set to launch its initial public offering (IPO) on March 12, 2024. This article aims to provide potential investors with a comprehensive overview of the popular vehicles IPO, including key details, financial information, and potential considerations.

IPO Details and Timeline

• Price Band: ₹280 – ₹295 per share
• Issue Size: Up to ₹600 crore (on the upper price band)
• Fresh Issue: ₹250 crore
• Offer for Sale (OFS): 11.92 million shares by BanyanTree Growth Capital II LLC
• Subscription Dates: March 12 – March 14, 2024
• Listing Date: March 19, 2024

Fund Usage

• ₹192 crore allocated for debt repayment (company and subsidiaries)
• Remaining funds for general corporate purposes

Company Financials and Business Segments

Popular Vehicles boasts a diversified business model, categorized into three key segments:

• Passenger vehicles (including luxury): Dealerships for Maruti Suzuki, Honda Cars India, and Jaguar Land Rover India.
• Commercial vehicles: Dealerships for Tata Motors and Daimler India Commercial Vehicles.
• Electric two-wheeler and three-wheeler vehicles: Dealerships for Piaggio Vehicles and Ather Energy.

The company has witnessed significant growth in recent years, with:

• Revenue: ₹4,875 crore in FY23 (40.65% YoY growth)
• Net Profit: ₹64.07 crore in FY23 (90.3% YoY growth)
• EBITDA: ₹217.2 crore in FY23 (35.5% YoY growth)

Investment Considerations

While the popular vehicles IPO presents an opportunity for potential investors, it’s crucial to consider various aspects before making a decision:

• Growth Potential: The Indian automobile market is expected to experience continued growth in the coming years, particularly in the electric vehicle segment, which Popular Vehicles is catering to. However, competition within the dealership space remains intense.
• Financial Performance: The company’s recent financial performance has been positive, with increasing revenue and profitability. However, investors should carefully analyze past financial statements and future projections to assess sustainability.
• Valuation: Determining the appropriate valuation for the company requires comparing it to peers and considering growth prospects. Analyzing the price-to-earnings (P/E) ratio and other valuation metrics can be beneficial.
• Risks: Investors should be aware of potential risks associated with the popular vehicles IPO, including economic downturns, fluctuations in fuel prices, and intense competition within the dealership industry.

The popular vehicles IPO offers an opportunity for investors to participate in the growth of a leading automobile dealership chain in India. However, careful due diligence and a thorough understanding of the company’s financials, business model, and associated risks are essential before making any investment decisions. Consulting with a qualified financial advisor can be valuable in navigating the complexities of the IPO process and making informed investment choices.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.