Popular Vehicles and Services IPO Day 1 Subscription Status
Popular Vehicles and Services IPO opened for binding on 12th March 2024 and will close on 14th March 2024.
Popular Vehicles and Services Limited, a renowned automotive dealership in India, boasts an extensive distribution network and a wide geographical reach that spans several states. With a strong presence in Kerala, Tamil Nadu, Karnataka, and Maharashtra, the company offers a diverse range of vehicles from various esteemed manufacturers. Their showrooms and service centers are strategically located in major cities and towns, ensuring accessibility and convenience for customers. The company's commitment to providing high-quality vehicles and exceptional service has cemented its reputation as a trusted name in the automotive industry.
IPO of Popular Vehicles and Services got off to a slow start on Tuesday, March 12th, the first day of bidding. As of the close of Day 1, the issue was subscribed only 27%, with investors bidding for 39.27 lakh equity shares against the total offer size of 1.44 crore shares. The retail investor bought 40% of the portion set aside for them, and the non-institutional investors picked 7% of their allotted quota, according to the NSE.
The Popular Vehicles Limited intends to raise Rs 601.55 crore with their offer, which has a fixed price range of Rs 280 to Rs 295 per equity share. Fresh shares and an OFS (Offer for Sale) are also part of the public offering; the fresh shares will raise the first Rs 250 crore. From OFS, the remaining sum (Rs 351.55 crore) will be raised.
Popular Vehicles and Services operates dealerships for Maruti Suzuki India, Honda Cars India, Jaguar Land Rover India, Tata Motors, Daimler India Commercial Vehicles, Piaggio Vehicles, and Ather Energy.
With a profit of Rs 64.07 crore for FY23, it made 90.3 percent more than the year before. EBITDA increased by 35.5 percent to Rs 217.2 crore, while revenue increased by 40.65 percent to Rs 4,875 crore. However, the EBITDA margin decreased from 4.6 percent to 4.45 percent in the prior year.
On revenue of Rs 2,835 crore, the net profit for the six months ending in September of FY24 was Rs 40 crore.
About the Company
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 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.(Date not mentioned).
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).
Popular Vehicles & Services IPO: Should You Subscribe?
Popular Vehicles and Services Limited (PVSL) hit the markets with its IPO on March 12th, 2024. While the company is a leading automobile dealership chain, deciding whether to subscribe to the IPO requires careful consideration. Here's a breakdown of the key factors to weigh before making your decision:
Positives:
Market Leader: PVSL boasts the title of India's leading diversified automobile dealership in terms of revenue (as of Fiscal 2023). This established position signifies a strong presence in the market.
Fully Integrated Model: The company operates a fully integrated business model, potentially leading to operational efficiency and cost advantages.
Growth Potential: The Indian automobile sector is expected to witness continued growth. As a major player, PVSL could benefit from this trend.
Negatives:
Modest Day 1 Subscription: The IPO received only a 27% subscription on the first day, raising concerns about investor interest.
Price Band: The price band of Rs 280-295 per share might be on the higher side compared to some competitors.
Limited Public Issue Size: The public offering size of Rs 601.55 crore might be less appealing to large investors seeking bigger allocations.
Other Considerations:
Financials: Carefully analyze PVSL's financial statements, including profitability, debt levels, and future growth projections.
Competition: Research the competitive landscape of the automobile dealership sector and PVSL's position within it.
Market Conditions: Evaluate the overall stock market sentiment and any potential risks or opportunities.
Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.