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Popular Vehicles IPO Remains 46% Subscribed On The Last Day, QIB and Retail Portion Fully Booked

Popular Vehicles and Services Last Day Subscription Status

Popular Vehicles & Services, a company situated in Kerala, is offering its shares for sale for between Rs 280 and Rs 295 each. Investors may submit applications for up to 50 shares, and their multiples thereafter. 

On the third and final day of the bidding process, Popular Vehicles & Services' initial public offering (IPO) went smoothly. Still, the bidding for the issue was lackluster. On day one, just 27% of the issue was subscribed; by day two, 46% of the issue was subscribed.

Popular Vehicles and Services Limited, a renowned name in the automotive sector, traces its origins back to the vibrant city of Kochi. The company was founded by a visionary promoter family with a passion for automobiles. Their journey began in the year 1983, intending to provide high-quality vehicles and exceptional service to the people of Kerala. The inception of Popular Vehicles and Services Limited was fueled by the need to create a reliable and trustworthy vehicle dealership that could cater to the growing demand for automobiles in the region.

It was the vision of the late Mr. K. P. Paul, who foresaw the potential of an organized automotive service sector in a rapidly modernizing India.

The business started with a simple yet profound purpose: to provide high-quality vehicles and unparalleled services to the burgeoning middle class of India. This vision was rooted in the belief that access to reliable transportation could significantly enhance the quality of life and economic productivity of individuals and businesses alike.

Over the years, Popular Vehicles and Services Limited has expanded its footprint across various cities, evolving from a single dealership to a conglomerate with diversified interests in automotive sales, services, and financing. The company's history is embellished with milestones that reflect its commitment to excellence and customer satisfaction.

As we look back at the journey of Popular Vehicles and Services Limited, we are reminded of the resilience and adaptability that have been the cornerstones of its success. From its city of origin to its nationwide presence today, the company continues to drive forward with innovation and integrity at its core.

Popular Vehicles & Services, a company situated in Kerala, is offering its shares for sale for between Rs 280 and Rs 295 each. Investors may submit applications for up to 50 shares, plus their multiples of that number. Through an offer-for-sale (OFS) of up to 1,19,17,075 equity shares, as well as the selling of new equity shares valued at Rs 250, the company hopes to raise Rs 601.66 crore through an initial public offering (IPO).

The data shows that on Thursday, March 14, investors bid 1,46,19,950 stock shares, or 1.01 times, more than the 1,44,15,110 equity shares that were available for subscription. The issue is up for bid, and it started on Tuesday, March 12 and ends today, Thursday, March 14.

A 1.30 times subscription was made to the portion designated for qualified institutional investors, whereas 99 percent of the allocation for individual investors was filled. The quota for the workers was exceeded 7.33 times. But as of the same time, only 62% of the area reserved for non-institutional bidders had received bids.

Popular Vehicles & Services' gray market premium has not changed, despite the firm charging a premium of Rs 5-7 on the unofficial market, which suggests a flat listing for investors. On the first day of bidding, the premium was approximately Rs 25-30 in the grey market.

Brokerage businesses are optimistic about the issue because of its low valuations, lengthy history in the car industry, profound penetration, creative market tactics, and excellent profit margins. However, they believe that the main challenges to their business are unpredictability in driving down car sales, rising demand for electric vehicles, OEM costs, operational inefficiencies, and fierce competition.

Popular Vehicles and Services received Rs 180.17 crore from anchor investors the day before its initial public offering (IPO) by allocating 61,07,325 shares at a price of Rs 295 each. Qualified institutional investors (QIBs) will receive 50% of the net offer, while non-institutional investors (NIIs) will receive 15% of the shares. Thirty-five percent of the net offer will go to retail investors.

Popular Vehicles IPO Allotment Date

Following the mandatory implementation of the T+3 listing regulation on December 1, 2023, the mainboard issue must be listed no later than three working days following the conclusion of the auction. Thus, the IPO listing date for Popular Vehicles shouldn't be extended until March 19, 2024. If so, share allocation needs to be completed by today or Monday. Thus, the announcement of share allotment for applicants to the Popular Vehicles IPO should come either today or on Monday.

Revenue, Sales, and Profit

PVSL has consistently demonstrated strong financial performance with a steady increase in revenue year over the years. This growth trajectory highlights the company's ability to expand its market share and customer base effectively.

For the fiscal year that ended in March of FY23, the company reported a rise in net profit of ₹64.07 crore, or a 90.3% increase. Revenue increased from ₹3,484.20cr in FY22 to ₹4,892.63cr in FY23. The operating margin was under pressure, too, as it dropped from 4.6% to 4.45% in the prior year. With ₹2,835 crore in revenue, the net profit for the half of FY24 ended in September was ₹40 crore.

By maintaining a balance between cost-effective production and premium pricing strategies, PVSL maximizes its profitability.

Popular Vehicles and Services Limited IPO

  • Issue Date: The issue date of an IPO refers to the specific date on which the shares of a company are issued to the investors who have subscribed to the IPO. This is the date when the company officially allocates shares to its subscribers. (March 12, 2024 to March 14, 2024).

  • Listing Date: The "listing date" is when these shares are first traded on a stock exchange. This marks the beginning of public trading, allowing all market participants to buy and sell the company's shares.(March 19, 2024).

  • Face Value of Shares: The face value of shares is the nominal value of a stock that is determined by the issuer at the time of issuing the shares. It is usually a small amount, that does not reflect the actual market value of the shares. The face value of shares is used to calculate the accounting value of a company's equity, as well as the dividend payments and the par value of bonds. ( IPO Face Value: INR 2 per share).

  • Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: INR 280 to INR 295 per share).

  • Lot Size: Lot size refers to the minimum number of shares an investor can purchase in an Initial Public Offering (IPO). It is determined by the company going public and is a way to standardize the number of shares offered to investors. (Lot Size: 50 Shares).

  • Total Issue Size: Total issue size is the total value of shares a company plans to sell during its IPO. It is calculated by multiplying the number of shares offered by the price per share. The total issue size gives investors an idea of the scale of the IPO and the potential market capitalization of the company post-IPO. (Total Issue Size: 20,391,651 shares (aggregating up to ₹601.55 Cr)).

  • Fresh Issue: Fresh issue in an IPO refers to the new shares a company creates and sells to the public for the first time during the offering. This is the primary way a company raises capital through an IPO. The money raised from the fresh issue is used for various purposes as outlined in the company's prospectus, such as funding expansion plans, repaying debt, or investing in research and development. (Fresh Issue: 8,474,576 shares (aggregating up to INR 250 Cr)).

  • Offer for Sale: The offer for sale, which is the amount and type of shares that the company is selling to the public. The offer for sale can be either primary or secondary, or a combination of both. A primary offer for sale means that the company is issuing new shares and raising fresh capital. A secondary offer for sale means that the existing shareholders are selling their shares and receiving the proceeds. A combination offer for sale means that both new and existing shares are being sold. (Offers for Sale: 11,917,075 (aggregating up to ₹ 351.55 Cr)).

  • Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).

  • Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE, NSE).

  • Retail Shares Offered: Retail shares offered refer to the portion of shares that are made available to individual retail investors during an Initial Public Offering (IPO). (Retail Shares Offered: Not less than 35% of the net offer).

  • QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: Not more then 50% of the net offer).

  • NII (HNI) Shares Offered: NII (HIN) Shares offered means Non-Institutional Investors (High Networth Individuals) shares, which are reserved for investors who do not fall into the retail or QIB categories and typically involve larger amounts of money. (NII Shares Offered: Not less than 15% of the net offer).

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