Landmark Cars Ltd., a leading premium automotive dealership in India will head to the primary markets on Tuesday with its Rs 552 crore Initial Public Offering (IPO).

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The issue, which will be a mixture of a fresh issue of shares and an offer for sale through which existing investors would sell their shares will open for subscription on Tuesday and end on Thursday, November 15.

Price band for the IPO has been fixed between Rs 481 to Rs 506. Investors can apply for a lot of 29 shares and in multiples of 29 thereafter. If the stock lists on the upper end of the price band, it will have a market capitalisation of over Rs 2,000 crore.

The IPO will consist of a fresh issue of Rs 150 crore along with an offer for sale worth Rs 402 crore. Shareholders that will be selling their shares in the offer for sale include:

Landmark cars ranks among the premium automotive dealerships in India. It is the top dealer in the country for brands like Mercedes, Honda, and Jeep. Apart from these three companies, it also has dealerships for Renault.

It also has a commercial vehicle dealership for Ashok Leyland in India.

In an interaction with CNBC-TV18, Sanjay Thakker of Landmark Cars said that the funds received from the IPO will be used to pay working capital debt, which is close to Rs 300 crore. He also said that the working capital debt is seasonal in nature and the company does not have any long-term debt.

Thakker further added that the company will continue to grow via inorganic means, adding that they have invested in a tech company which will help give real-time valuation of pre-owned cars.

Landmark cars has its presence across the automotive retail value chain. It is involved in the sale of new vehicles, after-sales service including the sale of spare parts, lubricants and accessories, sales of pre-owned passenger vehicles and also in facilitating the sale of third-party financial and insurance products.

The company has a network of 112 outlets, of which 59 are sales showrooms and 53 are for after sales service.

Investors like Manish Chokhani and Gautam Trivedi are part of the company's board as independent directors.

Landmark Cars' vehicle dealership network is spread across 32 cities in eight states and union territories including Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West Bengal and NCT Delhi. These regions comprised of half of the Indian vehicle demand in financial year 2022.

The company has also signed a Letter of Intent with the automaker BYD, a global EV leader, for being their dealer in NCT Delhi and Mumbai for their electric PV sales.

According to CRISIL Research, the premium Passenger Vehicle segment is expected to grow at a Compounded Annual Growth Rate of 10-12 percent over financial year 2022 to financial year 2027. On the other hand, the luxury segment is expected to grow at a 14-16 percent compounded rate during the same period.

How Do The Financials Stack Up?

Landmark Cars turned profitable in financial year 2021 while its sales have grown at a compounded rate of 15.8 percent over financial year 2020 to financial year 2022.

The company's margin has also doubled to 6 percent in financial year 2022 from 3 percent in financial year 2020.

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First Published:Dec 13, 2022 7:47 AM IST