Kochi-based Popular Vehicles and Services, engaged in the automotive dealerships and services space, on Wednesday, fixed Rs 280-295 as the price band for its Rs 602-crore initial share sale that opens on Tuesday next week.
The issue consists of Rs 250 crore of fresh issue and Rs 352 crore of offer for sale by the promoters led by Naveen Philip, the managing director of the company, and his Kuttukaran family, which now holds 69 per cent of the company.
Promoter Banyan Tree Growth Capital is selling 19 per cent of its 29 per cent ownership in the company.
Post-issue, the promoters' shareholding will fall to 61 per cent while that of Banyan Tree will come down to 10 per cent, John Verghese, the chief financial officer of the company, told PTI here.
Banyan Tree has been with Popular since 2015 when it had picked up 33 per cent for Rs 65 crore. In the run-up to the issue, the PE had sold 3 per cent at Rs 355 a share back to the company.
According to Verghese, the floor price is 140 times the face value (Rs 2 per equity) and the cap price is 147.50 times the face value.
Philip further said, that Popular, which has been in the automotive space for the past seven decades, was one of the 16 first dealerships that Maruti Suzuki issued way back in 1984 and the first in Kerala.
Verghese said the company had Rs 2,900 crore revenue in FY22 from which it had earned Rs 33 crore in net profit. The numbers jumped to Rs 4,975 crore and Rs 64 crore in FY23 and Rs 2,834 crore and Rs 40 crore, respectively in the first half of FY24, which is 58 per cent of the top line of the past fiscal.
He said Popular, which has its focus on after-sales services more than sales, said as much as 56 per cent of the FY23 gross margins came from services, of which 76 per cent came in from the bodyshop business and 15 per cent of the turnover. While it sold around 60,000 vehicles last year, it serviced a little more than one million vehicles in the same year.
But its net margin is very low at 1.4 per cent while the same for Landmark, which is the only other listed auto dealership, had it at 2.5 per cent but at a much lower top line and bottom line.
It has 432 touchpoints, including 100 showrooms and 139 service centres.
