IPO Synopsis
Car dealership player Landmark Cars Limited has filed draft papers with SEBI to raise up to ₹762 crores via initial public offering (IPO).The issue consists of a fresh issue of equity shares aggregating to ₹150 crores and an offer for sale (OFS) of up to ₹612 crores.
The company may consider a Pre-IPO Placement aggregating up to ₹30 crores which decrease the initial issue size effectively. TPG Growth, which had invested about $25 million in Landmark Cars in 2015, may be able to offload part of its stake in the IPO. The book running lead managers to the offer namely, Axis Capital Limited and ICICI Securities Limited.
Objective of the Issue
The proceeds from the issue will be used for:
1. To utilise ₹120 crore for repayment/pre-payment, partly or full, of certain borrowings availed by it
2. General corporate purposes
About Landmark Cars Ltd
Group Landmark, which was founded by Sanjay Thakker in 1997, also runs an insurance broking business and employs more than 3,000 people. Landmark Cars, based out Ahmedabad, has over 100 dealerships across the country for brands including Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. It also caters to the commercial vehicle retail business of Ashok Leyland in India.
The auto dealership business of Landmark Cars is spread across 29 cities in places such as Gujarat, West Bengal, Maharashtra, Madhya Pradesh, Delhi, and Punjab. The group recently announced its association with China-based electric vehicle (EV) manufacturer BYD for the sale and after-sales services of its EVs in India.
CRISIL Research expects the premium segment to grow at a CAGR of 10-12% CAGR from Fiscal 2021 to Fiscal 2026, while the luxury segment is expected to grow at a CAGR of 20-22% during the same period in Fiscal 2021, it sold 13,282 new vehicles including new passenger vehicles of Mercedes-Benz, Honda, Volkswagen, Jeep and Renault and new commercial vehicles of Ashok Leyland
It also provides after-sales service and spare parts. The offerings at each of its dealerships comprise repair and collision repair services and include both warranty work, insurance claim work and customer paid services.
The company also deals in buying and selling of pre-owned passenger vehicles.
Landmark Cars Ltd Financial Status
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue | 1956.1 | 2218.6 | 2826.5 |
| EBITDA | 120.1 | 83.2 | 120.1 |
| PAT | 11.1 | -28.9 | -24.4 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Total Assets | 887.9 | 831.8 | 1008.0 |
| Share Capital | 18.3 | 18.3 | 18.3 |
| Total Borrowings | 327.4 | 357.9 | 478.8 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Net cash generated from / (used in) operating activities | 42.8 | 209.7 | 54.9 |
| Net cash from / (used in) investing activities | -22.0 | -65.9 | -37.9 |
| Net cash flow from / (used in) financing activities | -33.4 | -148.3 | -27.6 |
| Net increase (decrease) in cash and cash equivalents | -12.7 | -4.5 | -10.6 |
Peer Comparison
There are no listed companies in India that engage in a business similar to that of the company.
Key Points
-
Strengths:
1. Leading automotive dealership for major OEMs with a strong focus on high growth segments
2. Growing presence in after-sales segment leading predictable growth in revenues and superior margins
3. Robust business processes leveraging technological innovation and digitalization
4. Comprehensive business model capturing entire customer value-chai -
Risks:
1. It is subjected to the significant influence of, and restrictions imposed by OEMs pursuant to the terms of its dealership or agency agreements that may adversely impact the business
2. Success depends on the value, perception, marketing and overall competitiveness of the OEMs’ vehicle brands in India
3. The decision by any of the OEMs not to renew, to terminate or to require adverse material modifications to any of its dealership or agency agreements entered into with them could have a material effect.
4. Increasing competition among automotive dealerships through online and offline marketing and competition from the unauthorized service centres may have an adverse impact on the business.
How to apply for an IPO?
-
Login to your 5paisa account and select the issue in the
current IPO section -
Enter the number of lots and price at which you wish to
apply for -
Enter your UPI ID and click on submit. With this, your
bid will be placed with the exchange -
You will receive a mandate notification to block funds in
your UPI app -
Approve the mandate request on your UPI and funds
will be blocked
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FAQs
The data for Landmark Cars is yet to be announced.
The data for Landmark Cars is yet to be announced.
The data for Landmark Cars is yet to be announced.
The IPO comprise of a fresh issue of equity shares aggregating to ₹150 crores and an offer for sale (OFS) of up to ₹612 crores.
Landmark Cars is promoted by Sanjay Thakker.
The data for Landmark Cars is yet to be announced.
The data for Landmark Cars is yet to be announced.
Axis Capital Limited and ICICI Securities Limited are the book running lead managers to the issue.
The proceeds from the issue will be used for:
1. To utilise ₹120 crore for repayment/pre-payment, partly or full, of certain borrowings availed by it
2. General corporate purposes
To apply for the IPO, follow the steps given below
• Login to your 5paisa account and select the issue in the current IPO section
• Enter the number of lots and price at which you wish to apply for
• Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
• You will receive a mandate notification to block funds in your UPI app
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