Popular Vehicles and Services IPO Day 2: Check GMP, review, subscription status. Should you subscribe to the issue?
- Popular Vehicles and Services IPO comprises fresh issue of ₹250 crore and OFS of up to 11,917,075 equity shares. Subscription status on day 1: 27%, with retail investors at 47% and NII at 11%. Employee portion oversubscribed at 3.83 times.
Popular Vehicles and Services IPO opened for subscription on Tuesday, March 12 and will close tomorrow (Thursday, March 14). The issue was off to a sluggish start on Day 1 although its employee portion was fully booked in the first half itself. The overall subscription status was 27% on day 1, as per BSE data. The retail investors portion has been subscribed 47%, Non Institutional Investors (NII) portion has been booked 11%, and Qualified Institutional Buyers (QIB) portion is yet to be booked. The employee portion has been subscribed 3.83 times.
Popular Vehicles IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
The employee portion has been reserved equity shares aggregating up to ₹1 crore. A discount of ₹28 per equity share is being offered to eligible employees bidding in the employee reservation portion.
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The price band has been fixed in the range of ₹280 to ₹295 per equity share of the face value of ₹2. Popular Vehicles and Services IPO lot size is 50 equity shares and in multiples of 50 equity shares thereafter. The issue raised ₹180.17 crore from anchor investors on Monday, March 11.
The company handles every aspect of owning a car, including selling new cars, maintaining and repairing them, giving out spare parts and accessories, helping to buy and sell used cars, running driving schools, and helping to sell insurance and financial products from third parties.
Popular Vehicles and Services IPO Subscription Status
The subscription trend for Popular Vehicles IPO was slow and steady on the second day amid a subdued secondary market. The Popular Vehicles IPO subscription status was 45%, as per BSE data.
The retail investors portion has been subscribed 78%, Non Institutional Investors (NII) portion is booked 20%, and Qualified Institutional Buyers (QIB) portion is yet to be booked. The employee portion has been booked 6.16 times.
Popular Vehicles and Services IPO details
Popular Vehicles and Services IPO comprises a fresh issue of ₹250 crore, and an offer-for-sale (OFS) of up to 11,917,075 equity shares of face value of ₹2 each by the selling shareholder, BanyanTree Growth Capital II, LLC.
The company intends to allocate the net proceeds to finance various goals, including the complete or partial repayment and/or prepayment of certain loans obtained by the company and its subsidiaries, Popular Autoworks Private Limited (PAWL), Popular Mega Motors (India) Private Limited (PMMIL), Kuttukaran Green Private Limited (KGPL), Kuttukaran Cars Private Limited (KCPL), and Prabal Motors Private Limited (PMPL); together with general corporate purposes.
The Popular Vehicles & Services IPO's book running lead managers are ICICI Securities Limited, Nuvama Wealth Management Limited, and Centrum Capital Limited, and the registrar is Link Intime India Private Ltd.
Popular Vehicles and Services IPO GMP today
Popular Vehicles IPO GMP today or grey market premium is +5. This indicates Popular Vehicles and Services share price were trading at a premium of ₹5 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Popular Vehicles and Services share price was indicated at ₹300 apiece, which is 1.69% higher than the IPO price of ₹295.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Popular Vehicles and Services IPO Review
Swastika Investmart Ltd
The brokerage describes PV&S as a reputable car dealer with a track record of grabbing growth opportunities, a fully integrated business strategy, and a presence in four states. The firm also has long-standing partnerships with top OEMs. A additional indication of the company's financial soundness is its steady profitability.
Some major risks, nevertheless, demand serious thought.Dependency on OEMs for PV&S. Unresolved consumer complaints may negatively impact a brand's reputation, and the Indian auto industry is quite competitive.
“Despite these risks, the IPO valuation of 28.86x P/E appears reasonable. Considering its strengths, growth potential, and moderate valuation, we recommend that investors consider applying for this IPO with a long-term perspective,” the brokerage said.
Hensex Securities Ltd
The brokerage cites the following factors: the company's established track record of profitable financial performance and steady growth; its long-standing presence in the automotive industry; its well-established relationships with top OEMs; its penetration of the markets in which it operates; its fully integrated business model, which leads to increased margin and business stability; and its ability to recognise and seize both organic and inorganic growth opportunities. A "SUBSCRIBE" to the issue is advised by the brokerage from the standpoint of long-term investing.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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