Popular Vehicles and Services Limited IPO

Popular Vehicles and Services Limited, established in 1983, is a prominent automobile dealership in India offering a wide range of services throughout the vehicle ownership lifecycle. From new vehicle sales to servicing, repairs, spare parts distribution, pre-owned vehicle sales, and more, the company caters comprehensively to vehicle owners' needs. Operating through an extensive network across several states, Popular Vehicles and Services Limited has expanded its operations through strategic acquisitions and investments, enhancing its post-sale service offerings and repair verticals.

In the fiscal year ending March 2023, the company witnessed significant growth in total assets, net worth, total revenue, and profit after tax (PAT). Its profit after tax increased from ₹324.55 million in Fiscal 2021 to ₹640.74 million in Fiscal 2023. The company's revenue streams from vehicle sales, services, and other sources have shown consistent growth over the years, reflecting its strong market position and customer base.

The Popular Vehicles and Services Limited IPO is scheduled from March 12 to March 14, 2024, with an issue price ranging from Rs. 280 to Rs. 295 per share. The IPO aims to raise Rs. 601.55 crore, with 35% reserved for retail investors, 50% for institutional investors, and 15% for non-institutional investors. The company plans to utilize the net proceeds for loan repayments and general corporate purposes.

Despite its strengths, the company faces certain weaknesses, including negative cash flows in the past, ongoing legal proceedings, and increasing competition in the automotive dealership sector. However, its seasoned management team, successful market penetration, and demonstrated profitability position it as a strong contender in the industry.

Investors may consider the IPO, given the company's dominant market position, strategic partnerships, and improving financial performance. However, they should conduct thorough due diligence and consider the associated risks before making investment decisions. Overall, Popular Vehicles and Services Limited presents a promising opportunity for medium to long-term investors seeking exposure to the Indian automobile sector.

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