Landmark Cars IPO gets 29.94% Anchor allocated

Landmark Cars IPO Anchor Allotment details
Landmark Cars IPO Anchor Allotment details

IPOs
by 5paisa Research Team Last Updated: 2022-12-13T21:43:41+05:30

The anchor issue of Landmark Cars IPO saw a robust response on 12th December 2022 with 29.94% of the IPO size getting absorbed by the anchors. Out of the 1,09,11,159 shares on offer, the anchors picked up 32,66,797 shares accounting for 29.94% of the total IPO size. The anchor placement reporting was made to the BSE late on Monday. Landmark Cars IPO opens on 13th December 2022 in the price band of Rs. 481 to Rs. 506 and will close for subscription on 15th December 2022 (both days inclusive). The entire anchor allocation was made at the upper price band of Rs. 506. Let us focus on the anchor allotment portion ahead of the Landmark Cars Ltd IPO.

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations as under, “As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through book building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB) like a foreign portfolio investor or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. Anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors, and instil confidence in them. Anchor investors also largely aid in price discovery of the IPO

Anchor placement story of Landmark Cars Ltd

On 12th December 2022, Landmark Cars Ltd completed the bidding for its anchor allocation. There was an enthusiastic response as the anchor investors participated through the process of book building. A total of 32,66,797 shares were allotted to a total of 14 anchor investors. The allocation was done at the upper IPO price band of Rs. 506 which resulted in an overall allocation of Rs. 165.30 crore. The anchors have already absorbed 29.94% of the total issue size of Rs. 552.10 crore, which is indicative of the robust institutional demand.

Listed below are the 14 anchor investors who got shares as part of the anchor allotment of the company. The entire anchor allocation of Rs. 165.30 crore was spread across these 14 anchor investors. Here is the complete list of anchor allottees ahead of the opening of the IPO of Landmark Cars Ltd.

Anchor Investor

No. of Shares

% of Anchor Portion

Value Allocated

HDFC Small Cap Fund

494,073

15.12%

Rs.25.00 crore

Nippon India Small Cap Fund

494,073

15.12%

Rs.25.00 crore

Goldman Sachs India Equity Portfolio

494,073

15.12%

Rs.25.00 crore

Aditya Birla Sun Life Small Cap Fund

237,162

7.26%

Rs.12.00 crore

Pinebridge India Equity Fund

197,635

6.05%

Rs.10.00 crore

Edelweiss Recently Listed IPO Fund

197,635

6.05%

Rs.10.00 crore

Maven India Fund

197,635

6.05%

Rs.10.00 crore

Bengal Finance and Investments

197,635

6.05%

Rs.10.00 crore

Elara India Opportunities Fund

197,635

6.05%

Rs.10.00 crore

BNP Paribas Arbitrage Fund - ODI

158,108

4.84%

Rs.8.00 crore

Resonance Opportunities Fund

102,161

3.13%

Rs.5.17 crore

Morgan Stanley Asia Singapore

99,657

3.05%

Rs.5.04 crore

BNP Paribas Arbitrage

99,658

3.05%

Rs.5.04 crore

Quantum State Investment Fund

99,657

3.05%

Rs.5.04 crore

Grand Total

32,66,797

100.00%

Rs.165.30 crore

Data Source: BSE Filings

While the Landmark Cars GMP had opened above the Rs. 50 levels, it has since fallen to around the Rs. 30 levels. has remained stable after falling to Rs. 34. That shows a relatively subdued premium of 5-6% on listing. This has led to reasonable anchor response with the anchors taking in 29.94% of the total issue size. The QIB portion in the IPO will be reduced to the extent of the anchor placement done above. Only the balance amount will be available for QIB allocation as part of the regular IPO.

The general norm is that, in anchor placements, smaller issues find it hard to get FPIs interested while larger issues do not interest mutual funds. Landmark Cars Ltd has been a mix, getting good response from FPIs but it has also got relatively strong response from the domestic mutual funds and other NBFCs, considering its product positioning in the Indian market. The number and spread of the Foreign Portfolio Investors has been fairly healthy in this case. With strong SIP flows, most equity funds are flush with cash at this point of time and that has helped the MF appetite for anchor allocation in this IPO of Landmark Cars Ltd. Aditya Birla AMC, HDFC MF, Nippon India AMC and Edelweiss AMC were the four AMCs to participate in the anchor allotment of Landmark Cars Ltd.

Out of the total 32,66,797 shares allotted by way of anchor placement, Landmark Cars Ltd allotted a total of 14,22,943 shares to 4 domestic mutual fund schemes across 4 AMCs. The mutual fund allocation represents 43.56% of the overall anchor allocation.


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