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Popular Vehicles IPO: Key Details You Must Know Before Deciding

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Popular Vehicles IPO

Looks like India is zooming in on a fast-growing economy! Popular Vehicles & Services (Popular Vehicles) IPO comes at the right time as people are buying more cars, giving the industry a big boost. If you’ve been following the buzz around the upcoming IPO on 12 March 2024, let’s delve into some key details.

Popular Vehicles IPO Details 

1. Business Overview

Founded in 1983, Popular Vehicles is a leading automobile dealership group with a presence across multiple car brands in India. They offer sales, service, and spare parts for various vehicles, catering to a large customer base. These include buying a new or used vehicle and servicing and repairing it. 

2. Objective of the Issue

The company plans to use the net proceeds from the IPO for the following:

  • Debt Repayment: Utilize ₹192 crore to repay or prepay some or all of its borrowings and those of its subsidiaries: VMPL, PAWL, PMMIL, KGPL, KCPL, and PMPL.
  • General Corporate Purposes: The remaining Net Proceeds will be used for general business needs.

3. Financial Performance

The company achieved a 90.3% year-on-year increase in net profit, reaching a total of ₹64.07 crore for the financial year ending March FY23. The revenue from operations also saw a 40.65% increase, climbing to ₹4,875 crore compared to the previous year. Its EBITDA (earnings before interest, tax, depreciation, and amortization) showed a 35.5% growth, reaching ₹217.2 crore during the same period.

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Source: Popular Vehicles DRHP 

Source: Popular Vehicles DRHP

4. Competitive Landscape

With the increasing demand for automobiles, Popular Vehicles faces stiff competition from many seasoned players in the private and commercial vehicles space, including:

  • Maruti Suzuki India Limited
  • Tata Motors Limited
  • Mahindra & Mahindra Limited
  • TVS Motor Company Limited
  • Bajaj Auto Limited

As the competitive landscape in each segment is constantly evolving with new players and technological advancements, it’s crucial to evaluate Popular Vehicles’ market position to gauge its efficiency and success.

5. Growth Potential

Popular Vehicles’ growth potential in the Indian automobile dealership market is promising. The Indian passenger vehicle market is expected to witness a healthy growth rate of 5-7% CAGR over the next five years. Car companies expect sales to grow faster this year by over 8%. 

The booming luxury car segment and the government’s push for electric vehicles could also contribute to the company’s growth. Add a diversified portfolio and an established network, and the company will likely live up to its name.   

6. Risks and Challenges

  • Intense Competition: The Indian automobile market is highly competitive. Popular Vehicles must strategize effectively to differentiate themselves and stand out.
  • Economic Fluctuations: Economic downturns can impact consumer spending and affect vehicle sales.
  • Disruption from Online Sales: The growing trend of online vehicle sales could challenge traditional dealerships. Popular Vehicles may need to adapt their strategies.

7. Lead Managers

ICICI Securities, Nuvama Wealth Management, and Centrum Capital are the book-running lead managers for Popular Vehicles IPO. Link Intime India is the registrar.

Here’s a SWOT analysis of Popular Vehicles to provide a better understanding:

While India’s booming car market sets the stage for Popular Vehicles’ IPO, competition and economic factors are also crucial to consider. 

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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