- Bid will close on Thursday, March 14, 2024
- The Anchor Investor Bidding Data shall be Monday, March 11, 2024
- Bids can be made for a minimum of 50 Equity Shares and in multiples of 50 Equity Shares thereafter
NE BUSINESS BUREAU
AHMEDABAD, MARCH 10
Kerala-based automobile dealer Popular Vehicles and Services Ltd on Thursday announced it has set the price band at ₹280-295 a share for its ₹600 crore initial public offering that will open for subscription on Tuesday, March 12 and close on Thursday, March 14, 2024.
The Total Offer Size comprises fresh issue of Equity Shares aggregating up to ₹250 crore and Offer for Sale up to 11,917,075 Equity Shares valuing ₹352 crore by the promoters led by Naveen Philip, the managing director of the company, and his Kuttukaran family, which now holds 69 per cent of the company.
Naveen Philip and John Verghese at the
Promoter Banyan Tree Growth Capital is selling 19 per cent of its 29 per cent ownership in the company.
Post-issue, the promoters’ shareholding will fall to 61 per cent while that of Banyan Tree will come down to 10 per cent, John Verghese, the chief financial officer of the company, said.
Bids can be made for a minimum of 50 Equity Shares and in multiples of 50 Equity Shares thereafter.
The Anchor Investor Bidding Date shall be on Monday, March 11, 2024.
A discount of ₹ 28 per equity share is being offered to eligible employees bidding in the Employee Reservation portion.
Banyan Tree has been with Popular since 2015 when it had picked up 33 per cent for ₹ 65 crore. In the run-up to the issue, the PE had sold 3 per cent at ₹ 355 a share back to the company.
According to Philip, 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.
John Verghese said the company had ₹2,900 crore revenue in FY22 from which it had earned ₹ 33 crore in net profit. The numbers jumped to ₹ 4,975 crore and ₹ 64 crore in FY23 and ₹ 2,834 crore and ₹ 40 crore, respectively in the first half of FY24, which is 58 per cent of the top line of the past fiscal.
He said Popular, which has its focus on after-sales services more than sales, said as much as 56 per cent of the FY23 gross margins came from services, of which 76 per cent came in from the bodyshop business and 15 per cent of the turnover. While it sold around 60,000 vehicles last year, it serviced a little more than one million vehicles in the same year.
But its net margin is very low at 1.4 per cent while the same for Landmark, which is the only other listed auto dealership, had it at 2.5 per cent but at a much lower top line and bottom line.
It has 432 touchpoints, including 100 showrooms and 139 service centres.
The company proposes to utilize the net proceeds from IPO towards repayment and/or pre-payment, in full or part, of certain borrowings, availed by the company and certain of their subsidiaries, namely, PAWL, PMMIL, KGPL, KCPL and PMPL ₹1,920 million and balance amount for general corporate purposes.
ICICI Securities Limited, Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) and Centrum Capital Limited are the Book Running Lead Managers to the Offer.
