Kerala-based automobile dealer Popular Vehicles and Services has decided to launch its maiden public issue for subscription next week on March 12. The price band will be announced tomorrow, i.e. March 6.
The public issue will close on March 14, while the anchor book will be opened for a day on March 11.
The IPO comprises a fresh issue of shares worth Rs 250 crore by the company, and an offer-for-sale (OFS) of 1,19,17,075 equity shares by private equity fund BanyanTree Growth Capital II LLC.
Promoters hold 69.45 percent shareholding in the company and the remaining stake is owned by public shareholders, including BanyanTree.
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Currently, BanyanTree is the largest shareholder in the company, while three promoters - John K Paul, Francis K Paul, and Naveen Philip - own 23.15 percent equity shares each.
Popular Vehicles has reserved equity shares worth Rs 1 crore for its employees. The offer less the employee reservation portion is the net offer.
Half of the net issue size has been reserved for qualified institutional buyers, 15 percent for non-institutional investors (high networth individuals) and the balance 35 percent shares are booked for retail investors.
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The automobile dealer is going to utilise Rs 192 crore of the net fresh issue money for repaying debts of itself and of certain subsidiaries, and the balance fresh issue money will be kept for general corporate purposes.
As of December 2023, the amount of consolidated debt on its books was Rs 637.06 crore.
The company caters to the complete life cycle of vehicle ownership, right from the sale of new vehicles, servicing and repairing vehicles, distributing spare parts and accessories, to facilitating sale and exchange of pre-owned vehicles, operating driving schools and facilitating the sale of third-party financial and insurance products has recorded 90.3 percent on-year growth in net profit at Rs 64.07 crore for the financial year ended March FY23, though there was a bit of pressure on the operating margin front.
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Revenue from operations grew by 40.65 percent to Rs 4,875 crore compared to previous year. Its EBITDA (earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 35.5 percent to Rs 217.2 crore during the same period with margin falling to 4.45 percent, from 4.6 percent in previous year.
Net profit for six months period ended September FY24 stood at Rs 40 crore on revenue of Rs 2,835 crore.
Popular Vehicles categorises its automobile 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 acting as the merchant bankers to the issue.
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