Landmark Cars Share: A Tepid Debut

Landmark Cars Shares made a muted market debut on Friday. Landmark Cars got listed at Rs 471.30, a discount of 6.86 percent over its issue price of Rs 506 on BSE. On NSE, the scrip was listed at Rs 471, a discount of 6.92 percent. Landmark Cars shares were trading at a discount of Rs 15 in the grey market.

The company’s public offer had a price range of Rs 481-506 a share. The IPO was sold from 13 December 2022 to 15 December 2022 and comprised a fresh issue of shares up to Rs 150 crore and an offer for sale of up to Rs 402 crore, aggregating Rs 552 crore. The initial share sale received bids of over 2.46 crore (2,46,45,911) shares against the total issue size of over 80.41 lakh (80,41,805) shares.

The portion allotted for the qualified institutional buyers (QIBs) was subscribed 8.71 times, while that for non-institutional investors was subscribed 1.32 times and that of retail individual investors (RIIs) was subscribed just 59 percent. Separately, the employees’ portion was subscribed 2.93 times.

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“The issue has been fully priced, with a P/E ratio of around 28. Under the current market conditions, it would not be fair to expect much from its listing. As a result, allottees who applied for the public offering for listing premium should keep their stop loss at Rs 440,” said Pravesh Gour, Senior Technical Analyst at Swastika Investmart.

The company reported a loss of Rs 28.93 crore in fiscal 2020. As of 30 June 2022, the company has expanded its network to include 112 outlets in 8 Indian states and union territories, comprised of 59 sales showrooms and outlets and 53 after-sales services and spare outlets.

The company intends to raise Rs 552 crore through the IPO, which comprises a fresh issue of Rs 150 crore, and an offer for sale (OFS) of Rs 402 crore by selling shareholders including TPG Growth. The company will utilize the majority of fresh issue proceeds for repaying debts besides general corporate purposes. It has debt of Rs 464 crore as of June 2022, increasing sharply from Rs 308 crore in March 2022.

Landmarks Cars has a large network of car dealerships across the country, including premium brands such as Mercedes-Benz, Jeep, Volkswagen and Renault. The company also has a presence across the automotive retail value chain from sales, after-sales to authorized service centers, with over a hundred facilities over eight states in the country.