Landmark Cars IPO is looking to raise ~₹552 crore. The issue consists of fresh issues worth ₹150 crore and an offer for sale of up to ₹402 crore. Subscriptions under the Landmark Cars IPO will end on December 15. TPG Growth II SF is the major seller and also Aastha Limited, Sanjay Karsandas Thakker HUF, and Garima Misra are selling shareholders under the OFS. Landmark Cars Ltd. is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault.
- IPO Date: 13 – 15 December 2022
- Price band: ₹ 481 – 506
- FV : Rs. 5/-
- Issue Size:₹ 552 Cr (Fresh Issue ₹ 150 Cr and OFS ₹ 402 Cr)
- No of shares: 11,478,393–10,911,159 Shares
- Issue Breakup: QIB 35%, Retail – 50%, NII 15%
- Bid lot: 29 Shares
Landmark Cars raised Rs. 165.30 crore as part of anchor book which was spread across 14 anchor investors. The mutual fund allocation was made to 4 mutual fund schemes across 4 AMCs and represents 43.56% of the overall anchor allocation. Anchor investors who subscribed to more than 5% of the anchor books are as follows.
|Anchor Investor||% of Anchor Book|
|HDFC Small Cap Fund||15.12%|
|Nippon India Small Cap Fund||15.12%|
|Goldman Sachs India Equity Portfolio||15.12%|
|Aditya Birla Sun Life Small Cap Fund||7.26%|
|Pinebridge India Equity Fund||6.05%|
|Edelweiss Recently Listed IPO Fund||6.05%|
|Maven India Fund||6.05%|
|Bengal Finance and Investments||6.05%|
|Elara India Opportunities Fund||6.05%|
- Landmark Cars Limited was incorporated in 2006.
- Landmark Cars vehicle dealership network is spread across 31 cities in eight states and union territories including Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West Bengal and the NCR.
- As of June 30, 2022, Landmark has network of 112 outlets in 8 Indian states and union territories.
- This comprised of 59 sales showrooms and outlets and 53 after-sales service outlets.
- Company’s vehicle dealership network is spread across 32 cities in total 8 states and union territories which include Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West Bengal and Delhi.
- The selling shareholders in the Landmark Cars IPO are TPG Growth II SF, Aastha Ltd, Garima Misra and promoter Sanjay Thakker.
- Rs. 150 cr fresh issue, out of which Rs. 120 cr will go for debt repayment.
- Promoter 60% stake will to reduce to 55% post the IPO.
Landmark Cars IPO: Financials
|Particulars / (₹ Cr)||Q1FY23||FY22||FY21||FY20|
|Revenue from Operations||800.27||2,976.52||1,956.10||2,218.61|
|Revenue Growth (%)||–||52.17%||-11.83%||–|
|EBITDA as stated||52.83||187.28||120.06||83.2|
|EBITDA (%) as stated||6.59%||6.27%||6.11%||3.73%|
|Profit/Loss Before Tax||19.67||82.27||19.78||-24.64|
|Equity Share Capital||18.31||18.31||18.31||18.31|
|Post Issue share Cap||19.795|
|FV in Rs.||5|
|EPS post IPO FY22 ann||16.72|
|Market Cap Rs. Cr.||2003|
Assessment: Landmark Cars IPO
- The company has focused on the premium and luxury automotive segments.
- CRISIL expects premium segment to grow at a CAGR of 10-12% from Fiscal 22 to Fiscal 27, while luxury segment is expected to grow at a CAGR of 14-16%.
- Landmark Cars reported a loss in Fiscal 2020
- After-sales service and spares accounted for ~60% of the EBITDA in FY22. The company is growing its after-sales segment, as it results higher-margin revenues.
- The company has a online presence which helps lead generation for new vehicle sales by allowing customers to book test drives and better access.
- It has also investment in Chatpay Commerce ( Pitstop) and Sheerdriv as part of its foray into technology platforms.
- Major portion of its business operations are concentrated in the states of Gujarat and Maharashtra.
- In 2021, Landmark Cars dealership agreement with Mercedes-Benz got changed to an agency model whereby customers place orders directly to Mercedes-Benz and company will earn a commission.
- Landmark Cars IPO a the upper price band of Rs 506, is being offered at at P/E works out to 30.3. Though not comparable the only other listed peer is Competent Automobiles, which is an Authorized Dealer of vehicles from Maruti Suzuki India Limited for Delhi, Haryana and Himachal Pradesh area. It is a smaller company Company and trades at P/E of 7.2.
- For FY22, Landmark cars OPM stood at 5.87% and 6.70%, while it was 4.43% for Competent Automobiles.
- Landmark Cars is a proxy play for premium automobile sector but margin even in this sector on sales of new vehicles are not very high and valuation being demanded are bit streched.
- on back of its leadership position in premium car segment, one can expect Landmark cars to report good numbers over the next few years.
- GMP for Landmark Cars IPO which was reported to have started in Rs. 40-50 range, came to about Rs. 20/- may well be now nil or very low.
- At this juncture, I do not intend to subscribe to Landmark Cars IPO. One should keep a watch on QIB Numbers on Day 3. However anchor book allocation looks good and being in premium car segment as well as services and spares, it can do well in long term.
- Listing of Mainboard IPOs in last few issues has been quite discouraging.
- Please do your own diligence.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.