About Popular Vehicles & Services IPO
Popular Vehicles & Services Limited is a prominent automobile dealership company based in India. Their diverse range of services encompasses the sale of new vehicles, maintenance, distribution of spare parts, resale of pre-owned vehicles, operation of driving schools, and facilitating the sale of third-party financial and insurance products. The company operates within various business verticals, including passenger vehicle dealerships, commercial vehicle dealerships, and dealerships for electric three-wheelers and two-wheelers also.
As of December 31, 2023, the company boasted an extensive network comprising 61 showrooms, 133 sales outlets, 32 pre-owned vehicle showrooms, 139 authorized service centers, 43 retail outlets, and 24 warehouses spread across 14 districts in Kerala, 8 districts in Karnataka, 12 districts in Tamil Nadu, and 9 districts in Maharashtra.
| ipo Date | Min. Investment | Lot Size | Price Range | Issue Size | IPO Doc |
|---|---|---|---|---|---|
| 12 Mar – 14 Mar 2024 | ₹14,000 | 50 | ₹280 – ₹295 | 601.55 Cr | View |
Popular Vehicles & Services IPO timeline:
| Popular Vehicles & Services IPO | Date |
|---|---|
| IPO Offer Start | 12 March 2024 |
| IPO Offer Ends | 14 March 2024 |
| Allotment Finalisation | 15 March 2024 |
| Refund Initialisation | 18 March 2024 |
| Share Transfer to Demat | 18 March 2024 |
| Date of Listing | 19 March 2024 |
| Lot Size | 50 |
Financial Performance Overview
The financial performance overview of Popular Vehicles & Services IPO shows a steady increase in revenue, total assets, and profit (PAT) over the years, with revenue climbing from 2,894 in 2021 to 4,875 in 2023, total assets increasing from 1,119 to 1,504, and profit reaching 64.07 in 2023, reflecting positive growth trends.
| Year | Revenue | Total Assets | Profit (PAT) |
|---|---|---|---|
| 2021 | 2,894 | 1,119 | 32.46 |
| 2022 | 3,466 | 1,263 | 33.67 |
| 2023 | 4,875 | 1,504 | 64.07 |
Strengths and Risks of Popular Vehicles & Services IPO
Strengths:
- Longevity in the Automobile Industry: Established in 1983, the company benefits from the experience and heritage of its parent company, Kuttukaran Group, which has been operating in the automobile business since 1953.
- Expansive Network: With 30 showrooms, 84 sales outlets, and booking offices for new passenger vehicles, 21 showrooms, 44 sales outlets, and booking offices for commercial vehicles, 85 authorized service centers for passenger vehicles, 44 authorized service centers for commercial vehicles, along with dedicated facilities for pre-owned passenger vehicles, the company boasts a widespread network.
- Growth Trajectory: Adding 22 showrooms, 23 sales outlets and booking offices, and 47 service stations across all its dealerships from Fiscal 2021 to Fiscal 2023 reflects a strong growth pattern.
- Revenue Performance: The company’s total income has been consistently substantial, with Rs. 2848.21 cr, Rs. 4892.63 cr, Rs. 3484.19 cr, and Rs. 2919.25 cr for the six-month period ended September 30, 2023, and Fiscals 2023, 2022, and 2021 respectively.
Risks:
- Heavy Dependence on Top OEMs: Relying heavily on Maruti Suzuki and Tata Motors (commercial), which contribute over 80% of consolidated revenue, exposes the company to significant risks in case of non-renewal, termination, or adverse modifications to dealership agreements.
- Negative Cash Flows: Historical and potential future negative cash flows could impede operational capabilities and growth plans, impacting financial performance.
- Regional Revenue Concentration: The company’s revenue concentration in Kerala, Tamil Nadu, and Karnataka poses vulnerability to adverse developments, such as natural calamities, in these states.
- Dependency on Specific OEMs: Approximately 77.03% of business revenue is derived from dealerships of Maruti, Tata Motors (Commercial), and Honda, making the company susceptible to adverse developments in these OEMs’ growth, demand, or sales.
- Legal Proceedings: Ongoing legal proceedings may have adverse implications on the company’s business, reputation, and financial performance.
- Indebtedness and Restrictive Covenants: Consolidated indebtedness of Rs. 637.06 cr and associated restrictive covenants could adversely impact the company’s financial condition and operations.
- Customer Complaints: Unresolved customer complaints, with a total of 76,607 received in FY 2023, may lead to future litigation, affecting the company’s operations and reputation.
- OEM Incentives and Marketing: The company’s vehicle sales are influenced by OEMs’ incentives and marketing, directly impacting profit margins and financial performance.
