NEW DELHI : Kerala-based car dealership network Popular Vehicles is gearing up to become the second listed car dealer in India, following Landmark Cars’ ₹552 crore public share issue in December 2022.
The initial public offering of Popular Vehicles, featuring an offer for sale from private equity firm BanyanTree Capital and a fresh number of ₹250 crore, opens for subscription this month.
BanyanTree holds a 34% stake in the company. The remaining shareholding is equally divided among the three promoters of the company.
Popular Vehicles, after relaunching its IPO and recruiting new bankers, including Nuvama and ICICI Securities, is looking to attract investor interest that was lacking in its previous attempt.
Landmark Cars has shown an impressive return of 65% since its listing in December 2022.
In its prospectus filed with the Securities and Exchange Board of India, Popular Vehicles said it will use the proceeds of its IPO to repay debts incurred by various group units as well as for general corporate purposes.
The company operates passenger vehicle dealerships for Maruti Suzuki Ltd, Honda Cars, and Jaguar Land Rover (JLR), as well as commercial vehicle stores for Tata Motors Ltd and Bharat Benz.
Additionally, it houses showrooms for three-wheeler manufacturer Piaggio and e-two-wheeler manufacturer Ather Energy.
Although Popular Vehicles boasts of a diversified dealership chain across segments, around 65% of its total sales emanate from its Maruti Suzuki dealerships.
“Consolidation of dealer networks is expected in the coming years as automakers have started to prefer working with limited dealers,” said Gaurav Vangaal, associate director at S&P Global Mobility.
“This approach also strengthens trust and brand equity among car buyers. However, in the premium sector, the problem remains with the stagnation of the total volume of luxury brands, which does not increase above 1%,” Vangaal said. “However, the increase in average selling prices for luxury car manufacturers continues, which supports the overall business outlook for dealers.”
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Published: 05 Mar 2024, 16:57 IST
(tagsTo Translate)Popular Vehicles