Popular Vehicles and Services Lists at 2% Discount at Rs 289 per share on NSE

Popular Vehicles and Services provides end-to-end vehicle ownership solutions, including new and pre-owned vehicle sales, maintenance servicing, spare parts distribution, driving schools, and third-party financial and insurance products, debuted on the Indian stock market today.

The stock of Popular Vehicles and Services opened at Rs 292 per share on the BSE, reflecting a 1.02% discount from the final issue price of Rs 295 per share. The market capitalisation on the BSE stands at Rs 2078.99 crore. Conversely, on the NSE, the stock debuted at Rs 289.20 per share, representing a discount of 1.97%.

IPO Proceeds

The company plans to use the net proceeds to repay or pre-pay borrowings of itself and certain subsidiaries, namely VMPL, PAWL, PMMIL, KGPL, KCPL, and PMPL. Additionally, funds will be allocated for general corporate purposes.

Business Overview

Established in 1983, Popular Vehicles and Services Limited operates within the automotive dealership sector in India. The company offers comprehensive services across the entire lifecycle of vehicle ownership, encompassing the sale of both new and pre-owned vehicles, maintenance servicing, distribution of spare parts, provision of driving schools, and facilitation of third-party financial and insurance products. Its business model is categorized into three main segments: passenger vehicles, which include luxury vehicles, commercial vehicles, and electric two-wheeler and three-wheeler vehicles. With a diverse range of offerings and a focus on customer satisfaction, Popular Vehicles stands as a prominent player in India’s automobile industry.

Subscription details

On March 14, 2024, the final day of the IPO window, the IPO witnessed a moderate response, especially compared to other IPOs listed recently, with a subscription rate of a mere 1.25 times. The public issue received moderate interest, with the retail category being subscribed 1.07 times, while the QIB and NII categories reached subscription rates of 1.92 and 0.67 times, respectively.

The IPO price band was between Rs 280 to Rs 295 per share, with a face value of Rs 2 per share and a lot size of 50 shares. The total size of the company’s IPO was Rs 601.55 crore, and the final share issue price was fixed at Rs 295 each.

Conclusion

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have been disappointed, as the stock is listed at a discount on the listing day itself, and can choose to close their position. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.