Popular Vehicles IPO: Firm Fixes Price Band, Click Here To See All Details

Engaged in the automotive dealerships and services industry, the firm stated that its maiden offer includes a fresh issue of Rs 250 crore and an offer-for-sale (OFS) component worth Rs 352 crore

Popular Vehicles and Services on Wednesday fixed a price band for the upcoming initial public offering (IPO), set to open on Tuesday next week. The Kochi-based company said that it set a price band of Rs 280-295 for its public issue worth Rs 602 crore.

Engaged in the automotive dealerships and services industry, the firm stated that its maiden offer includes a fresh issue of Rs 250 crore and an offer-for-sale (OFS) component worth Rs 352 crore, reported PTI. The offer is being led by promoters including Naveen Philip, the firm’s managing director, and his Kuttukuran family, which controls 69 per cent stake in the company. 

Further, the firm’s promoter, Banyan Tree Growth Capital, is also offering 19 per cent out of its total holding of 29 per cent in the firm. John Verghese, CEO, Popular Vehicles and Services, sai, that once the issue goes through, the promoters’ stake in the company’s holding will drop to 61 per cent, while Banyan Tree’s share in the firm will decline to 10 per cent.

The CEO noted, “Banyan Tree has been with Popular since 2015 when it had picked up 33 per cent for Rs 65 crore. In the run-up to the issue, the PE had sold 3 per cent at Rs 355 a share back to the company. The floor price is 140 times the face value (Rs 2 per equity) and the cap price is 147.50 times the face value. Popular, which has been in the automotive space for the past seven decades, was one of the 16 first dealerships that Maruti Suzuki issued way back in 1984 and the first in Kerala.”

Regarding the firm’s financials, Verghese informed that the company posted a revenue of Rs 2,900 crore in FY22, and a net profit of Rs 33 crore in the period. The revenue for FY23 stood at Rs 4,975 crore and a net profit of Rs 64 crore. Further in the first half of the current financial year, the firm saw its revenue touch Rs 2,834 crore and scored a net profit of Rs 40 crore. This represented about 58 per cent of the top line numbers of the preceding fiscal year, the CEO noted.

The executive stressed that Popular focused more on after-sales services than sales, and as such, about 56 per cent of the gross margins of FY23 emerged from services, of which 76 per cent was collected from the bodyshop business. The firm sold about 60,000 vehicles last year, however, it services a little over one million vehicles during the same period. It reported a net margin of 1.4 per cent.