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Landmark Cars IPO Review: Landmark Cars Limited is set to drive its way into the Indian stock exchanges. The IPO of Landmark Cars Limited will open for subscription on December 13th, 2022, and close on December 15th, 2022. It is looking to raise Rs 552 Crores, of which Rs 150 Crores will be a fresh issue and the remaining Rs 402 Crores will be an Offer for Sale. In this article, we will look at the Landmark Cars IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

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Landmark Cars IPO Review – About The Company

Landmark Cars Limited, incorporated in 1998, is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault. In addition to that, the company also caters to the commercial vehicle retail business of Ashok Leyland in India.

The company stands as the number one dealer of Mercedes-Benz, Honda, and Stellantis (Jeep) in terms of sales volume in the Fiscal year 2021. In addition, it stood as the third-largest dealer of Renault in 2020.

The company also provides after-sales services and has authorized service centers for Mercedes-Benz, Honda, Volkswagen, Jeep, Renault, and Ashok Leyland.

The company caters to the entire customer value chain including retailing new vehicles, servicing and repairing vehicles, selling spare parts, lubricants, and other products, selling pre-owned passenger vehicles, and distributing third-party finance and insurance products.

It has a  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 National Capital Territory of Delhi.

The competitors of the company

There are no listed entities in India whose business portfolio is comparable with that of the company’s business.

Landmark Cars IPO Review – Financial Highlights

Landmark Cars IPO Review - financials
Landmark Cars IPO Review - financials

(Source: DRHP of the company)

Landmark Cars IPO Review – Industry Overview

The Indian passenger vehicle industry can be broadly classified into three main segments, namely, mass market vehicles, premium vehicles, and luxury vehicles.

According to the CRISIL Report, in Fiscal 2016, mass-market vehicles dominated the Indian premium vehicles (PV) industry with more than 60% market share. In the last five years, the premium vehicles segment has grown at a healthy 8% CAGR, expanding its contribution from 38% in Fiscal 2016 to 56% in Fiscal 2021. 

On the other hand, mass-market vehicle sales contracted at a CAGR of 7%, with its market share decreasing from 62% in Fiscal 2016 to 44% in Fiscal 2021.

Mercedes-Benz continues to dominate the luxury cars market in recent years. In Fiscal 2021, Mercedes Benz has a 44% market share in the Indian luxury vehicles segment, followed by BMW with a 36% market share, in value terms, according to the CRISIL Report. The ultra-luxury brands like Ferrari, Rolls Royce, and Lamborghini form an insignificant part of this overall market.

The premium automobile segment is expected to grow at a CAGR of 10-12% from Fiscal 2021 to Fiscal 2026, while the luxury segment is expected to grow at a CAGR of 20-22% during the same period, according to CRISIL Research report.

Strengths

  • It is a leading automotive dealer for major OEMs with a strong focus on high-growth segments in India.
  • The company is rapidly growing its after-sales business which is set to increase its revenue and profit margins.
  • The company has a comprehensive business model capturing the entire customer value chain.
  • The company is technologically advanced which helps them in reducing costs and increasing efficiency and thus improving margins.
  • The company is set to foray into the rapidly expanding Electric Vehicle (EV) market.

Weaknesses

  • The company is subject to the influence or restrictions imposed by any of the OEMs in terms of dealership or agency agreements which may affect their operations.
  • The business of the company is sensitive to factors such as the rate of inflation, and currency exchange rates.
  • The company operates in a competitive landscape. Thus, the increasing participation of companies through online and offline marketing can affect their business.
  • The company has been making losses for the last two years.
  • The auto industry is set to experience rapid changes in the next few years as there will be an increase in ridesharing/hailing services, advances in electric vehicle production, and driverless technology which might hinder the operations of the company, if not adapted to such changes.

Landmark Cars IPO Review – GMP

The shares of Landmark Cars Limited traded at a premium of 5.93% in the grey market on December 12th, 2022. The shares tarded at Rs 536. This gives it a premium of Rs 30 per share over the cap price of Rs 506. 

Landmark Cars IPO Review – Key IPO Information

Landmark Cars IPO Review - Key IPO

Promoters:  Sanjay Karsandas Thakker

Book Running Lead Managers: Axis Capital Limited and ICICI Securities Limited.

Registrar To The Offer: Link Intime India Private Limited

ParticularsDetails
IPO Size₹552 Crore
Fresh Issue₹150 Crore
Offer for Sale (OFS)₹402 Crore
Opening dateDecember 13, 2022
Closing dateDecember 15, 2022
Face Value₹5 per share
Price Band₹481 to ₹506 per share
Lot Size29 Shares
Minimum Lot Size1 (29 Shares)
Maximum Lot Size13 (377 Shares)
Listing DateDecember 23, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized:

  • Repayment/pre-payment, in full or in part, of certain borrowings availed by the Company
  • General corporate purposes

In Closing

In this article, we looked at the details of Landmark Cars IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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