Voler Car NSE SME IPO review (Avoid)

•    The company provides ETS services in major metros for home-to-office-to-home movements.
•    It posted growth in its top and bottom lines for the reported periods.
•    The company operates on an asset-light model with mix of owned/leased/and hired third party vehicles.
•    Based on the recent financial performance, the issue appears aggressively priced.
•    There is no harm in skipping this pricey bet.

ABOUT COMPANY:
Voler Car Ltd. (VCL) is primarily engaged in providing employee transportation services (ETS) to IT/ITeS, large corporates and MNCs clients with presence across various major cities in India. Its ETS solutions cover comprehensive home-to-office-to-home transportation, supported by 24/7 customer service, dedicated location teams, and a fleet of verified vehicles and chauffeur-drivers. It manages a pooled fleet of over 2,500 vehicles, including small cars, sedans, SUVs, electric vehicles, buses, and tempo travellers. In the fiscal year 2023-24, VCL successfully completed approximately 3,23,550 trips, averaging over 884 trips per day. 

Meanwhile, in the fiscal year 2024-25 (up to November 30, 2024), it has completed around 2,84,039 trips, with a daily average exceeding 1,183 trips. It operates largely on an asset-light model where the majority of vehicles are sourced from vendors rather than owned. This strategy allows it to maximize revenue by optimizing seat usage and enhancing overall employee mobility.
As on date the company operates in Kolkata, Mumbai, Pune, Bhubaneshwar, Delhi-NCR, Ahmedabad, Lucknow, Jaipur and Ludhiana with a fleet that includes both vendor-sourced and company leased vehicles. Its service offers a complete solution for corporate transportation needs, adhering to service level agreements (SLAs) to guarantee timely pick-ups and drop-offs.

VCL makes it a priority not to drop off women passengers last, and if such a situation arises, it ensures that an escort is provided for their safety. It has integrated GPS tracking system into services. Its operation team handles reservations, operations, car tracking, incident response, and manage the client SLAs. The integration of its third-party technology with GPS tracking system allows it to easily manage client’s corporate travel requirements from a single integrated system. As of December 31, 2024, it had 74 employees on its payroll. 

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3000000 equity shares to mobilize Rs. 27.00 cr. (at the upper cap). The company has announced a price band of Rs. 85 – Rs. 90 per share of Rs. 10 each. The issue opens for subscription on February 12, 2025, and will close on February 14, 2025. The minimum number of shares to be applied is for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.92% of the post-IPO paid-up capital of the company. From the net proceeds of the fresh equity issue, the company will utilize Rs. 20.38 cr. for working capital, and the rest for general corporate purposes. 

The IPO is solely lead managed by GYR Capital Advisors Pvt. Ltd., KFin Technologies Ltd., is the registrar to the issue. Giriraj Stock Broking Pvt. Ltd., and Wiinance Financial Services Pvt. Ltd., are the Market Makers for the company. GYR Capital is also a syndicate member, and Intellect Stock Broking Ltd. is a sub-syndicate member.

Having issued initial equity shares at par value, the company issued additional equity shares at a fixed price of Rs. 4600 per share in June 2024.  Rs.  It has also issued bonus shares in the ratio of 50 for 1 in August 2024. The average cost of acquisition of shares by the promoters is Rs. 0.20, and Rs. 11.49 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 8.14 cr. will stand enhanced to Rs. 11.14 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 100.29 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 24.83 cr. / Rs. 0.79 cr. (FY22), Rs. 26.63 cr. / Rs. 1.99 cr. (FY23), and Rs. 31.45 cr. / Rs. 3.56 cr. (FY24). For H1 of FY25 ended on September 30, 2024, it earned a net profit of Rs. 2.49 cr. on a total income of Rs. 21.58 cr. 

For the last three fiscals, the company has reported an average EPS of Rs. 3.41 and an average RoNW of – (139.57) %. The issue is priced at a P/BV of 6.71 based on its NAV of Rs. 13.42 as of September 30, 2024, and at a P/BV of 2.64 based on its post-IPO NAV of Rs. 34.04 per share (at the upper cap).

If we attribute FY25 annualized super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 20.18. Based on FY24 earnings, the P/E stands at 28.13. Based on its recent earnings, prima facie, the issue relatively appears aggressively priced. 

For the reported periods, the company has posted PAT margins of 3.32 % (FY22), 8.31% (FY23), 11.53% (FY24), 11.56% (H1-FY25), and RoCE margins of 60.88%, 88.30%, 123.06%, 30.02%, for the referred periods, respectively.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects. 

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown Wise Travel, and Shree OSFM, as their listed peers. They are trading at a P/E of 18.7 and 22.5 (as of February 06, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORD:
This is the 39th mandate from GYR Capital in the last four fiscals.  Out of the last 10 listings, all listed at premiums ranging from 4.18% to 90% on the date of listing.