Landmark Cars IPO review: Here’s everything you need to know

The Rs 552 crore Landmark Cars IPO will be available for subscription till Thursday, December 15, 2022, and the price band of the company has been fixed at Rs 481-506 per share.

The Landmark Cars issue comprises a fresh issue of equity shares aggregating to Rs 150 crore and an offer-for-sale (OFS) of up to Rs 402 crore.

Those selling shares through the OFS are TPG Growth II SF (equity shares aggregating up to Rs 325 core), Aastha Ltd (up to Rs 62 core), Sanjay Karsandas Thakker HUF (up to Rs 10 crore) and Garima Misra (up to Rs 5 crore).

The net proceeds from the fresh issue will be used for pre-payment of borrowings availed by the company’s subsidiaries and general corporate purposes, according to the red herring prospectus (RHP).

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.

TPG-backed Landmark Cars is 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 in India. The company has a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs (including sales of spare parts, lubricants and accessories), sales of pre-owned passenger vehicles and facilitation of the sales of third-party financial and insurance products.

Landmark Cars has 112 outlets in 8 Indian states and union territories, comprising of 59 sales showrooms and outlets and 53 after-sales service and spares outlets, as of June 30, 2022.

Investors who wish to subscribe to Landmark Cars IPO can bid in a lot of 29 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,674 to get a single lot of Landmark Cars Ltd. The shares will be listed on both BSE and NSE.

The applicants also must note that the cut-off time for UPI mandate acceptance is Thursday, December 15, 2022, upto 5:00 pm, the last day of IPO bidding. Further bids with confirmed status of mandate amount blocked (RC100) shall be considered as valid applications and hence, investors are advised to submit their UPI applications in IPO well in advance to avoid any last minute technical/systemic constraints that may hamper their ability to participate in IPOs by successfully accepting the mandate.

Axis Capital and ICICI Securities are the book-running lead managers to the offer while Link Intime India is the registrar of the issue.

Before heading into the IPO, Landmark Cars on Monday raised over Rs 165.29 crore (Rs 1,65,29,99,282‬) from 14 anchor investors in lieu of 32,66,797 equity shares at Rs 506 each, data from the stock exchanges showed.

The anchor investors include HDFC Small Cap Fund, Nippon India Small Cap Fund, Goldman Sachs Funds, Aditya Birla Sun Life Small Cap Fund, Edelweiss MF, Bengal Finance and Investment, Elara India Opportunities Fund, Morgan Stanley Asia (Singapore) and BNP Paribas Arbitrage among others.

The research team at Reliance Securities in their IPO note has given a “Subscribe” rating to the offer.

“Based on FY22 earnings, the company is valued at 30.3x P/E, 12.7x EV/EBITDA and 0.7x EV/Sales. Over the next couple of years premium market segment is expected to grow at a CAGR of 10-12 per cent while luxury vehicle segment is also expected to grow at a CAGR of 14-16 per cent. Landmark is likely to report healthy numbers over the next couple of years led by strong growth in premium car segment. In view of healthy financials, strong presence, leadership position, premium automotive retail business and valuation comfort, we recommend a ‘SUBSCRIBE’ to the issue,” the brokerage said.

The share allotment is likely to take place on Tuesday, December 20, 2022, and the shares are expected to be listed on Friday, December 23, 2022, according to the timeline given in the RHP.