The initial public offering of automotive retailer Landmark Cars has subscribed 17 percent on its debut as it has received bids for 14.04 lakh shares against offer size of 80.41 lakh shares.
Employees have bid 1.2 times the allotted quota, while retail investors have bought 17 percent shares of the portion set aside for them and the reserved portion of high networth individuals was subscribed 39 percent.
Qualified institutional buyers have bought 1,624 shares of the reserved portion of 22.91 lakh shares.
Here are 10 key things to know before subscribing public issue:
1) IPO Dates
The maiden public issue of the premium and luxury car brands retailer has opened for subscription on December 13. The offer will close on December 15.
This is the third public issue getting opened in December after Sula Vineyards, and Abans Holdings.
2) Price Band
The offer price band has been fixed at Rs 481 to Rs 506 per share.
3) IPO Details
Landmark Cars launched the public issue of Rs 552 crore shares that comprises a fresh issuance of shares worth Rs 150 crore and an offer for sale of Rs 402 crore.
TPG Growth II SF Pte Ltd is the biggest seller in the issue, offloading shares worth Rs 325 crore via offer for sale. Other selling shareholders are Aastha, Sanjay Karsandas Thakker HUF, and Garima Misra.
Shares worth Rs 1 crore have been reserved for employees, who will get them at a discount of Rs 48 a share to the final issue price.
4) Objectives of the issue
The company will use the fresh issue money to repay debt (Rs 120 crore) and for general corporate purposes, while the offer for sale funds will go to selling shareholders.
As of June 2022, the company had total borrowings of Rs 464.36 crore.
5) The lot size
Investors have to bid for at least 29 equity shares and in multiples of 29 thereafter.
The minimum investment by retail investors hence would be Rs 14,674 and the maximum they can invest is Rs 1,90,762 for 13 lots, as they are allowed to invest up to Rs 2 lakh.
6) Investors' reserved portion
Half of the offer has been reserved for qualified institutional buyers, 15 percent for high networth individuals and the remaining 35 percent for retail investors.
7) Company profile
Landmark Cars claims to be a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. It also has a commercial vehicle dealership with Ashok Leyland.
The company has a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs, sales of pre-owned passenger vehicles and facilitation of the sales of third-party financial and insurance products.
Incorporated in 1998, with the opening of the first dealership for Honda, Landmark Cars has expanded the network to include 112 outlets in eight states and union territories, which included 59 sales showrooms and outlets, as of June 2022.
CRISIL Research expects the premium segment to grow at a CAGR of 10-12 percent from FY22 to FY27, while the luxury segment is expected to grow at a CAGR of 14-16 percent during the same period.
As of FY22, Landmark Cars was the number one dealer in India for Mercedes in terms of retail sales and Honda and Jeep in terms of wholesale sales.
As far as risks go, Hem Securities said the concentration of all of the company's operations in Gujarat and Maharashtra heightens its exposure to adverse developments related to regulation, as well as economic, demographic and other changes in these states.
8) Financials
Landmark Cars reported a 494 percent growth in profit at Rs 66.2 crore for the year ended March FY22 from the previous fiscal, and revenue grew by 52 percent to Rs 2,976.5 crore in the same period, partly due to a low base in FY21 that was impacted by Covid-led lockdowns.
Profit for the quarter ended June FY23 stood at Rs 18.14 crore on revenue of Rs 800.3 crore.
The company has been improving its balance sheet and maintaining profitability. Its net debt to EBITDA ratio improved to 1.49 times in FY22, from 2.54 times in FY21, and 3.90 times in FY20.
Even the EBITDA margin expanded to 6.59 percent in Q1FY23, from 6.27 percent in FY22, 6.11 percent in FY21, and 3.73 percent in FY20, while return on equity was 6.71 percent in Q1FY23, 26.66 percent in FY22, 6.11 percent in FY21, and (17.03 percent) in FY20.
9) Promoter
Total promoters' shareholding in the company stood at 60.24 percent as per the RHP and the rest 39.76 percent is held by public shareholders.
Among public, investor TPG Growth has a 28.26 percent stake or 1.08 crore shares in the company.
Promoter Sanjay Karsandas Thakker is the chairman and executive director and Aryaman Sanjay Thakker is the executive director on the board.
Paras Somani is the executive whole-time director and Akshay Tanna is the nominee director of TPG Growth. Manish Balkishan Chokhani, Gautam Yogendra Trivedi, Sucheta Nilesh Shah, and Mahesh Pansukhlal Sarda are independent directors on the board.
10) Allotment and listing dates
The share allotment finalisation will be done by December 20. Unsuccessful investors will get refunds in their bank accounts by December 21, and the shares will be credited to the demat accounts of eligible investors by December 22.
The company will make its grand on the BSE and NSE on December 23.
Its IPO shares are trading at around 2-5 percent premium (over Rs 506, the upper end of the price band) in the grey market, analysts said.
Axis Capital and ICICI Securities are the merchant bankers to the issue, while Link Intime India is the registrar.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
