The IPO, which closes on March 14, is a combination of fresh equity issue of 84 lakh shares and an offer for sale (OFS) of 1.19 crore shares, which will be offloaded by Banyan Tree Growth Capital.
The company proposes to use the net proceeds for repayment of debt and other general corporate purposes.
Popular Vehicles IPO price band
The automobile dealer has fixed a price band of Rs 280-295 for its maiden public offer. At the upper end, the company plans to raise about Rs 602 crore.
The issue is being made through the book building process, wherein 50% of the offer is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors.
Popular Vehicles IPO – Analyst Take
Considering various demand drivers such as growth in new PV sales, rise in average vehicle prices, rising financial penetration and digital technology, we remain positive on the automotive dealership business in India, said Stoxbox.”On the financial performance front, the company’s Revenue/EBITDA/PAT grew at a CAGR of 29.8%/20.7%/40.6% during the FY2021-23 period. At the upper price band, the issue is valued at a P/E of 28.9x based on FY2023 earnings which we feel is fairly valued. We, therefore, recommend a “Subscribe” rating for the issue,” it said.Also Read | Popular Vehicles and Services IPO opens tomorrow. 10 things to know before subscribing to the issue
Popular Vehicles IPO GMP
According to market analysts, the current GMP of Popular Vehicles and Services is Rs 25 in the unlisted market.
Other details
Popular Vehicles is a diversified automobile dealer in India in terms of revenue for FY23, having a fully integrated business model.
It 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.
In FY23, Popular Vehicles clocked revenue growth of 41% year-on-year to Rs 4,875 crore, while profit after tax (PAT) jumped 90% to Rs 64 crore. For the period ended September 2023, revenue from operations were at Rs 2,835 crore and profit was at Rs 40 crore.
ICICI Securities, Nuwama Wealth and Centrum Capital are the book running lead managers to the issue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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