The IPO of Popular Vehicles & Services is a book-built offering valued at Rs 601.55 crores. It comprises a fresh issue of 0.85 crore shares totaling Rs 250.00 crores and an offer for sale of 1.19 crore shares amounting to Rs 351.55 crores.

The subscription for the Popular Vehicles & Services IPO commenced on March 12, 2024, and concluded on March 14, 2024. Allotment of shares for the IPO is anticipated to be completed by Friday, March 15, 2024. The Popular Vehicles & Services IPO is scheduled to be listed on both BSE and NSE, with a tentative listing date set for Tuesday, March 19, 2024.

The price range for the Popular Vehicles & Services IPO is established between ₹280 to ₹295 per share. Retail investors must apply for a minimum of 50 shares, requiring an investment of at least ₹14,750. sNII investors are required to invest in a minimum of 14 lots (700 shares), totaling ₹206,500. For bNII investors, the minimum investment is set at 68 lots (3,400 shares), amounting to ₹1,003,000.

The Offer comprises a Fresh Issue of up to ~ 8474576 Equity Shares, aggregating up to ₹ 250 crore by Company and an Offer for Sale of up to 11917075 Equity Shares aggregating up to ~₹ 351.55 Crore by the Selling Shareholders.

The company will not receive any proceeds from the Offer for Sale.

Objects of the Fresh Issue Our Company proposes to utilize the Net Proceeds towards funding the following objects:

• • Repayment and/or pre-payment, in full or part, of certain borrowings, availed by Company and certain Subsidiaries, namely, PAWL, PMMIL, KGPL, KCPL and PMPL.
  • General corporate purposes.

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About Popular Vehicle & Services Limited

Popular vehicle and services are a diversified automobile dealership in India. It caters to the complete life cycle of vehicle ownership, right from the sale of new vehicles, servicing and repairing vehicles, distributing spare parts and accessories, to facilitating sale and exchange of pre-owned vehicles, operating driving schools and facilitating the sale of third-party financial and insurance products.

Automobile dealership business is divided into three key segments:

1. Passenger Vehicles including Luxury Vehicles: -

1. Maruti Suzuki

• Arena
• Nexa

2. Honda
3. Jaguar Land Rover India Limited

2. Commercial Vehicles:

1. Tata Motors Limited
2.  Daimler India Commercial Vehicles Private Limited (“BharatBenz”)

(c) Electric two-wheeler and three-wheeler vehicles:

1. Piaggio Vehicles Private Limited,
2. Ather Energy Private Limited

In Fiscal 2023, passenger vehicle sales in India were concentrated in a few major states. The top 5 states are Maharashtra, Uttar Pradesh, Gujarat, Karnataka, and Tamil Nadu cumulatively contributed to more than 40.00% of national sales.

As of 31^st Dec’23, company has a network of 61 showrooms, 133 sales outlets and booking offices, 32 pre-owned vehicle showrooms and outlets, 139 authorized service centers, 43 retail outlets, and 24 warehouses located across 14 districts of Kerala, 8 districts in Karnataka, 12 districts in Tamil Nadu and 9 districts in Maharashtra.

The company has acquired 11 service centers and 2 showrooms from a dealer of Maruti Suzuki in Kerala in 2021. Further, it acquired 8 showrooms, 17 service centers and 3 sales outlets and booking offices of Bharat Benz in Tamil Nadu and Maharashtra.

Services and Repairs: Services, repairs, and maintenance under each of dealerships include work undertaken during warranty period, outside warranty period paid by the customer, running repair and collision repair services.

Pre-Owned Vehicles: It deals in the exchange, acquisition and sale of pre-owned passenger vehicles across vehicle dealerships.

Spare Parts and Accessories Distribution: Spare parts and accessories distribution business was operated through 69 touch points comprising of 2 multi-brand pre-owned vehicle retail outlet under the brand name ‘Kartrenz’, 43 retail outlets and 24 warehouses across Kerala and Karnataka.

Facilitating the Sale of Third-party Financial and Insurance Products: Sale of various third-party finance and insurance products in relation to the vehicles sold by them, extended warranty and maintenance contracts, as well as replacement and aftermarket services for automobile products.

Driving Schools: Setting up the first driving school in Ernakulam in the year 2006. Over the years, they expanded their network of driving schools by setting up a total of 7 driving schools across Kerala.

The automobile industry is one of the primary contributors to the Indian economy. Its contribution to India’s GDP has increased from 2.80% in Fiscal 1993 to approximately 7.10% in Fiscal 2023. India’s domestic automobile market is one of the largest automobile markets in the world, with annual domestic sales of over 20 million vehicles in Fiscal 2023.

In Fiscal 2023, domestic automobile industry was dominated by the two-wheeler vehicle sub-segment which contributed more than 70.00% to the overall automobile industry, followed by passenger vehicles contributing 18.00% of automobile sales volume in Fiscal 2023.

Tractors, commercial vehicles, and three-wheeler vehicles contributed the rest 10.00%. With the growth of the automobile industry, we have achieved significant organic growth in our revenue from sales over the past three Fiscals.

Risk:-

1. Popular Vehicles and Services has listed the introduction of modern technologies for new vehicles, such as autonomous driving systems, changes in emission norms and ban on diesel vehicles in major cities in India as key risk factors.
2. 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.
3. The company is subject to the significant influence of, and restrictions imposed by OEMs pursuant to the terms of dealership agreements. Non-renewal or termination or to require adverse material modifications of dealership agreements with its OEMs or any adverse material modifications made by its OEMs thereto, will have a material and adverse impact on its business prospects and results of operations.
4. A large portion of its business operations are concentrated in the states of Kerala, Tamil Nadu and Karnataka. Any adverse developments in these states could have an adverse effect on its business, results of operations and financial condition.
5. A large portion of our business revenue is derived from our dealership of Maruti and Tata Motors (Commercial). 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.
6. Increasing competition among automotive dealerships through online and offline marketing reduces its profit margins on vehicle sales and related businesses.
7. Its vehicle sales are impacted by the incentive, marketing, and other programs of the OEMs. Further, any adverse impact on its sales directly impacts on its profit margins and adversely affects our financial conditions and results of operations.
8. Margins earned from its services and repair vertically, and its spare parts and accessories distribution vertical may be impacted by pricing guidelines set by our OEMs which may adversely affect its financial condition and results of operations.