Landmark Cars IPO Details and Review – Should you Subscribe?

Gujarat based Landmark Cars IPO would open for subscription on 13th December, 2022. Landmark Cars Limited is the leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. Company generated strong revenue growth in the last 3 years. Should you invest in Landmark Cars IPO?

About Landmarks Cars Limited

Company is leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault.

They also have a commercial vehicle dealership with Ashok Leyland in India. They have a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs, sales of pre-owned passenger vehicles and facilitation of the sales of third-party financial and insurance products.

They have started its operations and opened its first dealership for Honda in CY1998, and have expanded the network to include 112 outlets in 8 Indian states and union territories, comprised of 59 sales showrooms and outlets and 53 after-sales service and spares outlets, as of June 30, 2022.

They focus on the premium and luxury automotive segments. CRISIL Research expects the premium segment to grow at a CAGR of 10-12% CAGR from Fiscal 2022 to Fiscal 2027, while the luxury segment is expected to grow at a CAGR of 14-16% during the same period. They were the number one dealer in India for Mercedes in terms of retail sales for Fiscal 2022, number one dealer in India for Honda and Jeep in terms of wholesale sales for Fiscal 2022 and were the top contributor to Volkswagen retail sales for calendar year 2021. In addition, they were at the third largest dealership in India for Renault in terms of wholesale sales contribution for calendar year 2021.

Landmark Cars IPO Details and Review

Landmark Cars IPO – Key Details

Opening Date 13-Dec-22
Closing Date 15-Dec-22
Issue Type Book Built Issue IPO
Face Value Rs 5 per equity share
IPO Price band Rs 481 to Rs 506 per equity share
Lot Size 29 Shares
Min Order Quantity 29 Shares
Listing at BSE and NSE
Total Issue Size Rs. 552 Crores
    Fresh issue     Rs. 150 Crores
    OFS     Rs. 402 Crores
Employee Discount Rs.48 Per Share

Landmark Cars IPO RHP

What are the strengths of Landmarks Cars Limited?

1) Leading automotive dealership for major OEMs with a strong focus on high growth segments

2) Growing presence in after-sales segment leading predictable growth in revenues and superior margins

3) Comprehensive business model capturing entire customer value-chain

4) Robust business processes leveraging technological innovation and digitalization

5) Profitable and improving balance sheet

6) Experienced Promoter and professional management team with technical expertise

What are the Objects of the IPO Offer?

Landmark Cars IPO Size is Rs 552 Crores which has OFS and fresh issue.

1) Offer for Sale for Rs 402 Crores: Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.

2) Fresh issue of Rs 150 Crores:  Fresh proceeds would be used to for the following.

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

Who are the promoters of Landmarks Cars Limited?

Sanjay Karsandas Thakker is the promoter of the company.

How is the company financial track record?

Here are the total assets, revenues and profits of the company in the last 3 years and 3 months.

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 30-Jun-22
Total Assets 831.8 887.9 1,085.4 1,209.4
Revenues 2,228.9 1,966.3 2,989.1 801.9
Profit After Tax -28.9 11.2 66.2 18.1
Profit % -1.30% 0.57% 2.21% 2.26%

Why to invest in Landmark Cars IPO?

Here are the positive factors in this company.

1) Landmarks Cars Ltd is the leading automotive dealership for major OEMs with a strong focus on high growth segments. It is generating predictable growth in after sales segment.

2) Company generated strong revenue growth in the last 3 years. Its revenues grew from Rs 2,228 Crores to Rs 2,989 Crores during FY20 to FY22.

Risk Factors of investing in Landmark Cars IPO

1) Company has incurred losses in FY20. It earned thin margins in FY21 too.

2) Out of the total IPO proceeds, Rs 402 Crores goes to OFS and company would not get anything from this.

3) They are subject to the significant influence of, and restrictions imposed by OEMs pursuant to the terms of its dealership or agency agreements which can adversely affect the operations of the company.

4) A large portion of its business operations is concentrated in the states of Gujarat and Maharashtra. Any adverse development in these states can affect the business.

5) The decision by any of its OEMs not to renew, to terminate or to require adverse material modifications to any of its dealership or agency agreements entered into with them could have a material and adverse effect on company business.

6) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

How to buy Landmark Cars IPO online through Zerodha?

If you do not have Zerodha account, sign-up here and proceed to the next step.

If you have a demat account with Zerodha, you can apply this IPO online using the UPI as a payment gateway. Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.

Follow below steps to apply this IPO in Zerodha platform:

1) Visit the Zerodha portal and login to the console.

2) Go to Portfolio and click the IPOs link.

3) Visit ‘Landmarks Cars Limited IPO’ row and click the ‘Bid’ button.

4) Enter your UPI ID, Qty and the Price which you want to bid.

5) Click on ‘Submit’ IPO application form.

6) Visit the UPI App (net banking or BHIM) to approve the mandate.

Landmarks Cars IPO Important Dates

Here are the important dates about Subscription, Allotment and Listing.

Offer Open 13-Dec-22
Offer close 15-Dec-22
Finalization of Allotment 20-Dec-22
Initiation of Refunds 21-Dec-22
Credit to Demat Account 22-Dec-22
IPO Shares Listing Date 23-Dec-22

Frequently Asked Questions (FAQs)

[sc_fs_multi_faq headline-0=”h2″ question-0=”What is Landmark Cars IPO date?” answer-0=”This IPO would open on 13th December, 2022 and closes on 15th December, 2022.” image-0=”” headline-1=”h2″ question-1=”What is Landmarks Cars Share Price?” answer-1=”The IPO share price band is Rs 481 to Rs 506 per share.” image-1=”” headline-2=”h2″ question-2=”What is Landmark Cars IPO Rating?” answer-2=”Company do not require to get an IPO rating as this issue is for equity shares. Currently, Landmarks Cars short term rating and long term rating are not available.” image-2=”” headline-3=”h2″ question-3=”How much portion allocated to each group of investors in this IPO?” answer-3=”1) QIB – Not less than 50% of the offered shares 2) NII / HNI – Not less than 15% of the offered shares 3) Retail – Not less than 35% of the offered shares ” image-3=”” headline-4=”h2″ question-4=”What is Landmark Cars IPO GMP today?” answer-4=”GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market. Landmarks Cars GMP today as per market observers is between Rs 42 to Rs 53. TopSharebrokers indicates GMP as Rs 53 IPOWatch tracks it as Rs 50 per share IPO Central indicates GMP as Rs 45 IPOWala says current GMP today is Rs 44 IPOBazar GMP is in the range of Rs 42-45″ image-4=”” headline-5=”h2″ question-5=”Landmarks Cars Share Price Valuation” answer-5=”Landmark Cars IPO price band is Rs 481 to 506 per share. If we consider FY2022 EPS of Rs 17.45, the P/E ratio works out to be 29x. If we consider last 3 years weighted EPS of Rs 8.44, the P/E ratio works out to be 60x. If we annualise Q1FY23 EPS, P/E ratio works out to be 26x. Means company is asking for the issue price in P/E of 26x to 60x. There are no listed peers who are in similar business. However, the P/E ratio of 26x to 60x can be considered as fully priced. ” image-5=”” headline-6=”h2″ question-6=”Landmark Cars IPO Review – Is it good or bad for investment?” answer-6=”After going through all these points, you might be wondering whether Landmark Cars IPO is good or bad for investment? Company is the leading automotive dealership for major OEMs with a strong focus on high growth segments. It has a predictable growth in after sales segment. Company generated strong revenue growth in the last 3 years. On the other side, it has incurred losses in FY20 and earns thin margins after that. Its margins have improved in the recent times. Its issue price is fully priced. Considering both positive and negative factors, one can invest in this IPO for a medium to long term.” image-6=”” count=”7″ html=”true” css_class=””]

Disclaimer: This article is for educational purpose only. Investing in IPO is high risk and one can lose their capital. Please consult financial advisor before investing in such high risk investment option.

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Suresh KP

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