Landmark Cars lists at 7% discount to issue at Rs 471

After Sula Vineyards, negative market sentiment marred the listing of another new entrant Landmark Cars. On December 23, the stock listed at a 7 percent discount to its issue price of Rs 506 apiece.

It started trading at Rs 471 on the NSE and Rs 471.30 on the BSE.

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The subscription numbers for the issue were not too exciting either. Qualified institutional buyers provided the maximum support to the offer, buying 8.71 times their allotted quota, while high net-worth individuals bid 1.32 times the portion set aside for them, but retail portion was booked only 0.59 times during the December 13-15 share sale.

One of the reasons behind muted subscription numbers was Landmark Cars' aggressive valuation, said analysts. With FY22 earnings per share at Rs 17.45, the stock was valued at a PE ratio of 28.9.

Group Landmark has a premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. It also caters to the commercial vehicle retail business of Ashok Leyland.

It has presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs (including sales of spare parts, lubricants and accessories), sales of pre-owned passenger vehicles and facilitation of third-party financial and insurance products.

"Competition from unorganized market and unlisted players is a key risk for the company. Any change in dealership terms and agency agreements from original equipment manufacturers (OEMs) is also a negative," according Religare Broking.

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