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- Popular Vehicles & Services Ltd
Popular Vehicles & Services Ltd
Popular Vehicles & Services Limited was originally incorporated as Popular Vehicles and Services Limited on July 5, 1983 at Kochi, Kerala, as a Public Limited Company. The Company converted to a Private Limited Company pursuant to a special resolution of Shareholders at the Extraordinary General Meeting (EGM) held on December 29, 2014 and the name changed to 'Popular Vehicles and Services Private Limited' vide a fresh Certificate of Incorporation issued on March 24, 2015 by the RoC, Kerala at Ernakulam. Thereafter, the Company was subsequently got converted into a Public Limited and its name was changed to Popular Vehicles and Services Limited vide Certificate of incorporation consequent upon conversion issued on July 10, 2018 by the RoC.
The Company is engaged in the business of sale and service of automobiles, spare parts and accessories, finance and insurance products. Headquartered in Kochi, India, the Company has operations in Kerala and Tamil Nadu. It is a leading diversified automotive dealership in India in terms of revenue, with a presence across the automotive retail value chain. It operate passenger vehicle dealerships of Maruti Suzuki India Limited, Honda Cars India Limited and Jaguar Land Rover India Limited and the commercial vehicle dealership of Tata Motors Limited. It classified business into four key segments, namely passenger cars, luxury vehicles and commercial vehicles.
In 1984, Company started automobile dealership business and established their first Maruti Suzuki showroom in Trivandrum, Kerala; the Popular Motors' dealership in Chennai, Tamil Nadu, for Maruti Suzuki passenger vehicles in 2002 and later on in 2015, the business in spare parts distribution.
In 2016, the dealership with Bharat Benz, for cars manufactured under the brand 'Bharat Benz', was operational by Subsidiary, Kuttukaran Cars Private Limited (KCPL), formerly known as Prabal Motors Private Limited, which got demerged into Prabal Motors Private Limited, pursuant to a Scheme of Arrangement made by the High Court of Judicature at Ernakulam, dated March 31, 2016. The Appointed date for the Scheme was April 1, 2016. Pursuant to this Scheme, all the business undertakings of KCPL in relation to the dealership with Bharat Benz were transferred to and vested in Prabal Motors.
As of March 31, 2021, Company operated through a network of 59 showrooms, 99 sales outlets and booking offices, 83 authorised service centres, 29 retail outlets, and 25 warehouses in Kerala, Chennai and Tamil Nadu. The JLR dealership, through luxury segment, was functional under Marqland' brand through 3 showrooms and 3 service centres in Karnataka in March, 2021. The Company thereafter, got into the business of electric vehicle in 2021.
The Company is planning to come out with an initial public offer by raising capital of Rs 150 crore Equity Shares through fresh issue and issuing 4,266,666 Equity Shares through Offer for Sale.
The Company is engaged in the business of sale and service of automobiles, spare parts and accessories, finance and insurance products. Headquartered in Kochi, India, the Company has operations in Kerala and Tamil Nadu. It is a leading diversified automotive dealership in India in terms of revenue, with a presence across the automotive retail value chain. It operate passenger vehicle dealerships of Maruti Suzuki India Limited, Honda Cars India Limited and Jaguar Land Rover India Limited and the commercial vehicle dealership of Tata Motors Limited. It classified business into four key segments, namely passenger cars, luxury vehicles and commercial vehicles.
In 1984, Company started automobile dealership business and established their first Maruti Suzuki showroom in Trivandrum, Kerala; the Popular Motors' dealership in Chennai, Tamil Nadu, for Maruti Suzuki passenger vehicles in 2002 and later on in 2015, the business in spare parts distribution.
In 2016, the dealership with Bharat Benz, for cars manufactured under the brand 'Bharat Benz', was operational by Subsidiary, Kuttukaran Cars Private Limited (KCPL), formerly known as Prabal Motors Private Limited, which got demerged into Prabal Motors Private Limited, pursuant to a Scheme of Arrangement made by the High Court of Judicature at Ernakulam, dated March 31, 2016. The Appointed date for the Scheme was April 1, 2016. Pursuant to this Scheme, all the business undertakings of KCPL in relation to the dealership with Bharat Benz were transferred to and vested in Prabal Motors.
As of March 31, 2021, Company operated through a network of 59 showrooms, 99 sales outlets and booking offices, 83 authorised service centres, 29 retail outlets, and 25 warehouses in Kerala, Chennai and Tamil Nadu. The JLR dealership, through luxury segment, was functional under Marqland' brand through 3 showrooms and 3 service centres in Karnataka in March, 2021. The Company thereafter, got into the business of electric vehicle in 2021.
The Company is planning to come out with an initial public offer by raising capital of Rs 150 crore Equity Shares through fresh issue and issuing 4,266,666 Equity Shares through Offer for Sale.
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Popular Vehicles & Services Ltd IPO Timeline
Popular Vehicles & Services Ltd IPO opens on 12-Mar-2024, and closes on 14-Mar-2024. The Popular Vehicles & Services Ltd IPO bid date is from 12-Mar-2024 to 14-Mar-2024. The Cut-off time for UPI Mandate confirmation is 12 P.M. on the next day of issue closing day.
| Event | Date |
|---|---|
| Popular Vehicles & Services Ltd IPO Opening Date | 12-Mar-2024 |
| Popular Vehicles & Services Ltd IPO Closing Date | 14-Mar-2024 |
| Basis of Allotment | 15-Mar-2024 |
| Initiation of Refunds | 18-Mar-2024 |
| Credit of Shares to Demat | 18-Mar-2024 |
| Popular Vehicles & Services Ltd IPO Listing Date | 19-Mar-2024 |
Popular Vehicles & Services Ltd IPO Lot Size
Popular Vehicles & Services Ltd IPO lot size is 50 shares. A retail-individual investor can apply for up to 13 lots (650 shares or 191750).
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Minimum | 1 | 50 | ₹14750 |
| Maximum | 13 | 650 | ₹191750 |
Popular Vehicles & Services Ltd IPO Details
| Popular Vehicles & Services Ltd IPO Date | 12-Mar-2024 to 14-Mar-2024 |
| Popular Vehicles & Services Ltd IPO Face Value | Shares of ₹2 per share |
| Popular Vehicles & Services Ltd IPO Price | ₹280 to ₹295 per share |
| Popular Vehicles & Services Ltd IPO Lot Size | 50 |
| Issue Size | Shares of ₹2 (aggregating up to ₹601.55 Cr) |
| Fresh Issue | Shares of ₹2 (aggregating up to ₹250 Cr) |
| Offer for Sale | Shares of ₹2 (aggregating up to ₹351.55 Cr) |
| Issue Type | Book Built Portion |
| Listing At | BSE, NSE |
| QIB Shares Offered | Not more than 3970461 |
| Retail Shares Offered | Not less than 7283477 |
| NII (HNI) Shares Offered | Not less than 3121490 |
| Company Promoters | John K Poul, Francis K Paul, Naveen Philip. |
Objects of the Issue
The company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the following objects:
- 1 Repayment and/or pre-payment in full or part of certain borrowings availed by the company and certain of its subsidiaries namely VMPL, PAWL,PMMIL,KGPL,KCPL and PMPL
- 2 General corporate purposes
Company Financials
Popular Vehicles & Services Ltd Financial Information (Restated)
| Period Ended | Total Assets | Total Revenue | Profit After Tax |
|---|---|---|---|
| 03-2023 | 853.36 | 2525.71 | 29.34 |
| 03-2022 | 822.43 | 1877.62 | 6.98 |
| 03-2021 | 705.08 | 1704.25 | 15.85 |
| Amount in ₹ Crore | |||
- Long standing presence in the automobile industry and well-established relationships with leading OEMs.
- Penetration in markets in which the company operates complemented by innovative marketing strategies.
- Fully integrated business model leading to business stability and higher margin.
- Proven ability to identify and capture inorganic as well as organic growth opportunities.
- Consistent track record of profitable financial performance and increasing growth.
- Experienced promoters and management team.
- The automotive industry is sensitive to changing economic conditions and various other factors. Any decline in demand for vehicles by individuals or entities may adversely impact its business prospects and results of operations.
- The company is subject to the significant influence of its OEMs. The company's top two OEMs i.e., Maruti Suzuki and Tata Motors (commercial), account for more than 80% of the Company's consolidated revenue in the six months period ended September 30, 2023 and each of Fiscal 2023, 2022 and 2021. Such significant influence of its OEMs and restrictions imposed by them pursuant to the terms of its dealership agreements may adversely impact the company's business, results of operations, financial condition and prospects, including our ability to expand into new territories and acquire additional dealerships.
- Non-renewal, termination or any adverse material modifications made by its OEMs to the dealership agreements, will have a material and adverse impact on its business prospects and results of operations.
- The Company has not received the required approval from the Central Government for appointment of John K. Paul as a Whole-time Director of the Company. The company cannot assure you that such approval will be received in a timely manner.
- The company has had negative cash flows in the past including negative cash flows from operating activities in the six months period ended September 30, 2023, and it is possible that the company may experience negative cash flows in the future which could adversely affect its cash flow requirements, its ability to operate the company's business and implement its growth plans, thereby affecting its financial performance.
- A large portion of its business operations, which is approximately 96.91% the Company's consolidated revenue for the six months period ended September 30, 2023, are concentrated in the states of Kerala, Tamil Nadu and Karnataka. Any adverse developments (including any natural calamities) in these states could have an adverse effect on its business, results of operations and financial condition.
- A large portion of its business revenue, approximately 77.03%, is derived from the company dealership of Maruti, Tata Motors (Commercial) and Honda. Any adverse developments in the growth, demand or sales for these OEMs could have an adverse effect on its business, results of operations and financial condition.
- Increasing competition among automotive dealerships through online and offline marketing reduces its profit margins on vehicle sales and related businesses.
- Its success depends on the value, perception, marketing and overall competitiveness of its brand and the company's OEMs in India. Any damage to its or the company's OEMs' brands or its failure to compete effectively in India could materially and adversely affect its business, results of operations and financial condition.
- The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchanges. Investors bear the risk of fluctuations in the price of Equity Shares and there can be no assurance that a liquid market for its Equity Shares will develop following the listing of the company's Equity Shares on the Stock Exchanges.
- The Pro Forma Financial Information included in this Red Herring Prospectus has been prepared by its Independent Chartered Accountant and is not indicative of its expected results or operations in the future periods or its future financial position or a substitute for the company past results.
- The company may fail to successfully implement its growth strategy, which includes acquiring existing dealerships, diversifying its portfolio and penetrating deeper into existing geographic locations which may adversely affect its financial condition and results of operations.
- There are outstanding legal proceedings involving the Company, Subsidiaries, Promoters and Directors, and adverse outcomes in such proceedings may negatively affect its business, reputation and results of operations.
- The agreements governing its indebtedness contain certain restrictive covenants which could adversely affect its financial condition and results of operations.
- The company is required to obtain certain licenses, regulatory permits and approvals for setting up its dealership and undertake the company operation. Any delay or inability to obtain such approvals may have an adverse impact on its business.
- Its Promoters, John K. Paul, Francis K. Paul and Naveen Philip, have provided personal guarantees for loan facilities obtained by it, and any failure or default by the company to repay such loans could trigger repayment obligations on its Promoters, which may impact its Promoters' ability to effectively service their obligations as the company's Promoters and thereby, adversely impact its business and operations.
- Its Promoters, who are also Directors, Key Management Personnel and Senior Management have interests in its business other than reimbursement of expenses incurred or normal remuneration or benefits. They may cause the Company to take actions, or refrain from taking actions, in order to benefit themselves instead of the Company's interests or the interests of its other Shareholders and which may be harmful to the Company's interests or the interests of the company other Shareholders, which may materially adversely impact its business, financial condition, results of operations and cash flows.
- The company has certain unresolved customer complaints which may result in future litigation against the Company.
- Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders' approval.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of loans taken from ICICI Bank Limited which is an affiliate of its Book Running Lead Manager, ICICI Securities Limited, which may lead to a conflict of interest.
- Its vehicle sales are impacted by the incentive, marketing, and other programs of the OEMs. Further, any adverse impact on its sales directly impacts its profit margins and adversely affects the company's financial conditions and results of operations.
- Margins earned from its services and repair vertical and the company's spare parts and accessories distribution vertical may be impacted by pricing guidelines set by its OEMs which may adversely affect its financial condition and results of operations.
- Its operations are subject to various governmental laws and regulations and certain state specific notifications and guidelines. If the company is found to be in violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect its operations, its business, operating results, and prospects could suffer.
- KEPL became its wholly owned subsidiary pursuant to the acquisition of its shares by the Company. Since PMPL was a wholly owned subsidiary of KEPL, PMPL also became a step down subsidiary of the Company. Any failure to realize the anticipated benefits of these acquisitions or any acquisition, joint venture or partnership that its may undertake in the future, may have an adverse effect on its business, results of operations, cash flows and financial condition.KEPL became its wholly owned subsidiary pursuant to the acquisition of its shares by the Company. Since PMPL was a wholly owned subsidiary of KEPL, PMPL also became a step down subsidiary of the Company. Any failure to realize the anticipated benefits of these acquisitions or any acquisition, joint venture or partnership that its may undertake in the future, may have an adverse effect on its business, results of operations, cash flows and financial condition.
- The company is highly dependent on its Key Managerial Personnel and its Senior Management Personnel for the company's business. The loss of or its inability to attract or retain such persons could have a material adverse effect on its business performance.
- Its success depends upon the company's ability to attract, develop and retain trained manpower while also maintaining low labour costs.
- The company may be subject to labour unrest, slowdowns and increased wage costs. Increase in any such cost could impact its profitability which may adversely affect its business and results of operations.
- The company's inability or failure to maintain optimum inventory levels or any theft of inventory may adversely affect its business, results of operations and financial condition.
- A failure of its information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on its business.
- The company may be required to make significant capital investments to its existing showrooms, sales outlets, service centers and other premises, the cost of which the company may be unable to recoup. Further, its may be required to make significant capital investment to maintain the quality of post sales service and spare parts availability.
- The company has licensed certain trademarks that its use as part of the company's operations from Kuttukaran Trading Ventures. The company does not have control on the other activities of Kuttukaran Trading Ventures under the same brand name, i.e. "Popular". Any change in operation of this entity could adversely affect its reputation and results of operations.
- The company use certain brands which are not registered trademarks, or specifically licensed to it. Any subsequent registration of this brand as a registered trademark by a third party would adversely affect its operations.
- Accidents and natural disasters could result in the slowdown or stoppage of its business and could also cause it to incur liabilities arising from human fatalities and damage to property.
- Its passenger vehicles and commercial vehicles sale is subject to seasonality, which may contribute to fluctuations in its results of operations and financial condition.
- Fraud or misconduct by its employees could adversely affect the company's reputation, business, results of operations and financial condition.
- The company is subject to risks associated with leasing space subject to lease agreements, sub-leasing and rental models and its may not be able to operate its dealerships and the company's showrooms, sales outlets and booking offices, authorized service centres, retail outlets and warehouses successfully. Further, the company may incur higher expenses as a result of leasing spaces which can lead to lower margins in its business operations.
- Any termination of existing dealership or closure of its showrooms, retail outlets and service centres, may have an adverse impact on its revenue and result of operations.
- The company relies on independent contractors and third party customer service providers to execute ancillary services and any failure on their part to perform their obligations could adversely affect its reputation, business, results of operations and cash flows.
- The company has availed unsecured loans from banks and other financial institutions, which may be recalled on demand thereby impacting its liquidity, and financial position.
- Its business is capital intensive. Difficult conditions in the global as well as Indian capital markets and economy generally may cause it to experience limited availability of funds, which may adversely affect its business and results of operations. The company cannot assure you that the company will be able to raise sufficient financing on acceptable terms, or at all.
- Its Statutory Auditors have referred to certain emphasis of matter in their examination report on the Restated Financial Information.
- The company has entered into, and will continue to enter into, related party transactions in future, which may potentially involve conflicts of interest.
- The company has certain contingent liabilities and commitments, which, if they materialize, may affect its financial condition.
- The Company was incorporated in 1983 and the company is unable to trace some of its historical records. The company is cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in relation to the untraceable filings and corporate records, which may impact its financial condition and reputation.
- As on date of this Red Herring Prospectus, 82,935 Equity Shares are held by 75 Shareholders of the Company who are untraceable.
- The company's insurance coverage may not be adequate to protect it against all potential losses, which may have a material adverse effect on its business, financial condition and results of operations.
- A downgrade in its credit ratings could materially adversely affect the company's business and financial condition and its ability to raise capital in the future.
- COVID-19 pandemic has affected its business, financial condition and results of operations in the past, the company cannot assure you of the extent to which COVID-19 or any other future calamities which are uncertain and cannot be predicted, will have a material and adverse impact on its business, financial condition and results of operations.
- The company may be subject to significant liability should there be any deficiencies in any of the vehicles sold by it or services provided by the company resulting in injury or death.
- This Red Herring Prospectus contains information from industry sources including the industry report commissioned from CRISIL exclusively for the Offer and paid for by the Company. Investors are advised not to place undue reliance on such information.
- Its Promoters will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Its Subsidiaries may not pay cash dividends on shares that the company hold in them. Consequently, the Company may not receive any return on investments in its Subsidiaries.
- The company cannot assure you that the deployment of the Net Proceeds in the manner intended by it will result in an increase in the value of your investment.
- Pursuant to listing of the shares, the Company may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.
- Sustained growth of its higher margin services and repair business, sale of pre-owned passenger vehicles and facilitation of sale of third-party financial products.
- Continue to increase sales at its existing dealerships.
- Expansion of its network and diversification of its product portfolio.
- Grow through strategic acquisitions.
- Invest in technology and increase its digital presence.
Popular Vehicles & Services Ltd IPO Promoter Holding
| Pre Issue Share Holding | 69.45% |
| Post Issue Share Holding | 61.17% |
Popular Vehicles & Services Ltd IPO Subscription Status (Bidding Detail)
The Popular Vehicles & Services Ltd IPO is subscribed 1.23 times on Mar 14, 2024 05:00:00 PM. The public issue subscribed 1.05 times in the retail category, 1.97 times in the QIB category, and 0.66 times in the NII category. Check Day by Day Subscription Details (Live Status)
| Category | QIB | NII | Retail | Employee | Total |
|---|---|---|---|---|---|
| Subscription (times) | 1.97 | 0.66 | 1.05 | 7.59 | 1.23 |
Popular Vehicles & Services Ltd IPO Prospectus
Popular Vehicles & Services Ltd IPO Listing Date
| Listing Date | 19 Mar 24 |
| BSE Script | 544144 |
| NSE Symbol | PVSL |
| Listing In | BSE, NSE |
| ISIN | INE772T01024 |
| IPO Price | ₹295 |
| Face Value | ₹2 |
Popular Vehicles & Services Ltd IPO Registrar
Link Intime India Pvt Ltd
Phone: +91 810 811 4949
Email: popularvehicles.ipo@linkintime.co.in
Website: www.linkintime.co.in
Popular Vehicles & Services Ltd IPO Lead Manager(s)
- ICICI Securities Ltd
- Nuvama Wealth Management Ltd
- Centrum Capital Ltd
FAQs on Popular Vehicles & Services Ltd IPO
Popular Vehicles & Services Ltd IPO, which opens for subscription from 12-Mar-2024 to 14-Mar-2024 has an issue size of ₹601.55 crore. The issue type is book building issue.
In case of pre-apply, your IPO order will be placed on the Exchange as soon as the official bidding for Popular Vehicles & Services Ltd IPO begins. You will receive a UPI request within 24 hours after the bidding period opens.
Popular Vehicles & Services Ltd IPO Opens for subscription from 12-Mar-2024 to 14-Mar-2024.
The lot size of Popular Vehicles & Services Ltd is 50 shares. Retail investors can subscribe to minimum 1 lot and maximum 13 lots. The minimum and maximum application value is ₹14750 and ₹191750 respectively.
Allotment date for Popular Vehicles & Services Ltd is 15-Mar-2024 and refund of application amount (in case allotment is not received) will begin from 18-Mar-2024. If your allotment goes through, then shares will be credited in your Demat account by 18-Mar-2024.
The registrar for Popular Vehicles & Services Ltd IPO is Link Intime India Pvt Ltd. You can check your IPO allotment status on the registrar's website.
The shares of Popular Vehicles & Services Ltd are proposed to be listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
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