Popular Vehicles IPO Ratings: Brokers Upbeat About Prospects


Popular Vehicles IPO has opened today for subscription and analysts are out with their coverage reports on the Vehicles and Services company. The upcoming IPO comprises both fresh issue and OFS. Priced at INR 280 – 295 per share, it aims to mobilize INR 601.55 crores, the IPO will remain active through 14 March 2024. Popular Vehicles IPO ratings are mostly positive. Analysts have highlighted multiple positive factors including strong operating performance, better cost-efficiencies, and a deep understanding of selling new vehicles to servicing, repairing, and distributing spare parts.

Popular Vehicles IPO Ratings

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Popular Vehicles IPO Ratings: Brokers Upbeat About Prospects

Analysts at BP Wealth have a positive view of the prospects of Popular Vehicles IPO. “On the financial performance front, the company’s Revenue/EBITDA/PAT grew at a CAGR of 29.8%/20.7%/40.6% during the FY2021-23 period. On the upper price band, the issue is valued at a P/E of 28.9x based on FY2023 earnings which we feel is fairly valued. We, therefore, recommend a “Subscribe” rating for the issue.”

GEPL Capital has also sounded a positive note on the prospects of Popular Vehicles IPO. “The company operates on a fully integrated business model and has shown robust financial performance with a 33.22% CAGR in revenue from FY21 to FY23. With strong partnerships with major OEMs like Maruti Suzuki, Tata Motors, and Honda, it enjoys diverse revenue streams across vehicle categories, including PV, CV, and electric 2W and 3W. The growth in premium PVs for key OEMs has fueled the company’s expansion, and the rising demand for electric vehicles in India further contributes to its positive outlook. Expanding its presence, the company added 22 showrooms, 23 sales outlets, and booking offices, along with 47 service stations between Fiscal 2021 and Fiscal 2023. By focusing on the service and repair segment, the company strategically taps into higher-margin revenue streams, solidifying its growth trajectory. Overall, the company is well-positioned in the market to capitalize on further growth opportunities. Hence, We recommend “Subscribe” rating to the issue.”

Canara Bank Securities also has a subscribe rating on the IPO. “Popular Vehicles provides complete services throughout the life cycle of vehicle ownership, including sales of new and preowned vehicles, servicing, spare parts distribution, driving schools, and third-party financial and insurance product sales. The company’s top line increased at a CAGR of 19% from FY 21. For FY23, the EBITA and PAT margins are to be 4.80% and 1.31%, respectively. For FY23, ROE and ROCE are 18.68% and 18.32%, respectively. The company’s P/E is valued at 28.86x for FY23. We recommend to subscribe for listing gains.”

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SBI Securities expressed similar positivity in its research note, “The company is valued at FY23 P/E and 1HFY24 annualised P/E multiple of 32.85x and 26.3x respectively at the upper price band on postissue capital. The company is raising INR 250 crore through fresh issue, of which INR 192 crore will be used to reduce the debt. In FY23, the company is the 7th largest Maruti Suzuki dealer under Arena and 9th under Nexa in India by volume. Ranked fourth in Tata Motors Commercial dealership sales during FY23, the company contributed 76.7% and 48.0% of sales in Kerala and Tamil Nadu as of 1HFY24. The company’s Revenue/PAT has grown significantly at a CAGR of 30%/41% from FY21-FY23. Indian Passenger and commercial vehicle market is expected to grow at the CAGR of 8% and 6% from FY23- FY28 giving an edge to the company’s growth. We recommend to subscribe the issue for long-term investment horizon.”

Ventura Securities is another brokerage house with positive Popular Vehicles IPO recommendations. “The company’s robust performance is reflected in its financial metrics, with its profit after tax (PAT) witnessing a notable increase from INR 324.55 million in Fiscal 2021 to INR 640.74 million in Fiscal 2023. Furthermore, its total income exhibited a steady growth trajectory, reaching INR 48,926.28 million in Fiscal 2023. With a workforce comprising 10,275 employees as of July 31, 2023, Popular Vehicles continues to strive for excellence in serving its customers and contributing to the automotive industry landscape in India. At the IPO price of INR 295 (upper price band), Popular Vehicles & Services Ltd is valued at PE multiple of 5.78 times.” We recommend “Subscribe” rating to the issue.” said its research note.

Popular Vehicles IPO Recommendation: Not Everybody Is Impressed

SMC Global offered 2 stars to the public offer while stating the following risk factors:

  • The automotive industry is sensitive to changing economic conditions and various other factors.
  • The company has had negative cash flows in the past including negative cash flows from operating activities.
  • A large portion of its business operations, which is approximately 96.91% of the company’s consolidated revenue for the six months ended September 30, 2023, are concentrated in the states of Kerala, Tamil Nadu, and Karnataka.
  • A large portion of business revenue, approximately 77.03%, is derived from its dealerships of Maruti, Tata Motors (Commercial), and Honda.
  • Its success depends on the value, perception, marketing, and overall competitiveness of the brand and its OEMs in India.

SAMCO Securities is also not positive and has advised clients to Avoid investing in the IPO. “The company doesn’t have any moat like its peer Landmark Cars which operates in a premium segment and earns higher margin. Although profit growth is there, cashflows of the company from operating activities were negative for six months period ending September 30, 2023. OEM concentration risk in total revenue is also a concern. Moreover, any adverse outcome from outstanding litigations for which provision has not been made can hit the bottom line and could be detrimental to company’s brand value. Therefore, even though on the basis of valuation the company looks reasonably fair, considering the qualitative factors involved.” We recommend to avoid the IPO.


Nevertheless, it is quite clear that most brokerage houses have sounded positive notes in Popular Vehicles IPO Ratings. According to the data collected by IPO Central from the grey market, the offer is not only actively traded but is also commanding a healthy premium indicating a positive listing.


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