Kerala-based automotive dealer Popular Vehicles and Services has announced plans to launch its inaugural public issue for subscription on March 12. The price range will be disclosed on March 6.
The public issue will remain open for subscription until March 14, while the anchor book will be available for one day on March 11.
The IPO consists of a fresh issuance of shares worth Rs 250 crore by the company, along with an offer-for-sale (OFS) of 1,19,17,075 equity shares by private equity fund BanyanTree Growth Capital II LLC.
Currently, promoters hold a 69.45 percent stake in the company, with the remaining shares held by public shareholders, including BanyanTree. The largest shareholder in the company is currently BanyanTree, while three promoters – John K Paul, Francis K Paul, and Naveen Philip – each own a 23.15 percent equity stake.
Popular Vehicles has set aside equity shares worth Rs 1 crore for its employees. The net offer excludes the employee reservation portion.
Half of the net issue size has been allocated for qualified institutional buyers, 15 percent for non-institutional investors (high net worth individuals), and the remaining 35 percent for retail investors. The automotive dealer plans to utilize Rs 192 crore of the net fresh issue proceeds to repay its debts and that of certain subsidiaries, with the balance earmarked for general corporate purposes.
As of December 2023, the consolidated debt on its books amounted to Rs 637.06 crore.
The company offers comprehensive vehicle ownership services, including sales of new vehicles, vehicle servicing and repairs, spare parts and accessories distribution, facilitating the sale and exchange of pre-owned vehicles, operating driving schools, and facilitating the sale of third-party financial and insurance products. It recorded a 90.3 percent year-on-year growth in net profit to Rs 64.07 crore for the financial year ended March FY23, despite some pressure on the operating margin front. Revenue from operations increased by 40.65 percent to Rs 4,875 crore compared to the previous year. Its EBITDA (earnings before interest, tax, depreciation, and amortization) rose by 35.5 percent to Rs 217.2 crore during the same period, although the margin decreased to 4.45 percent from 4.6 percent in the previous year.
The net profit for the six-month period ended September FY24 amounted to Rs 40 crore on revenue of Rs 2,835 crore.
Popular Vehicles divides its automotive dealership business into three key segments: passenger vehicles, including luxury vehicles; commercial vehicles; and electric two-wheeler and three-wheeler vehicles.
It operates dealerships for Maruti Suzuki India, Honda Cars India, Jaguar Land Rover India, Tata Motors, Daimler India Commercial Vehicles, Piaggio Vehicles, and Ather Energy.
ICICI Securities, Nuvama Wealth Management, and Centrum Capital are serving as the merchant bankers to the issue.
