Landmark Cars Limited, a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault has fixed the price band at ₹481 to ₹506 per equity share for its initial public offer. The initial public offering of the Company will open on Tuesday, December 13, 2022, for subscription and will close on Thursday, December 15, 2022. Investors can bid for a minimum of 29 Equity Shares and in multiples of 29 Equity Shares thereafter.
The public issue of equity shares bearing a face value of Rs 5 comprises a fresh issue of equity shares aggregating to Rs 150 crore and an offer for sale of up to Rs 402 crore by existing shareholders.
- Issue Opens on: Tuesday, December 13, 2022
- Issue Closes on: Thursday, December 15, 2022
- Price Band: ₹481 to ₹506 per Equity Share
- Face Value: Rs 5 per equity share
- Minimum Bid: 29 Equity Shares and in multiples
The Company, otherwise known as Group Landmark, has a presence across the automotive retail value chain, which includes sale of new vehicles (passenger as well as commercial), after-sales service and repairs (including sales of spare parts, lubricants and accessories) and sales of pre-owned passenger vehicles. As a value add-on to its passenger vehicle sales, it also facilitates sale of third-party financial products including insurance policies and vehicle finance through its dealerships.
The equity shares are proposed to be listed on BSE Limited and National Stock Exchange of India Limited.
Financials:
The Company had reported a loss after tax of ₹289.39 million in Fiscal 2020 and may incur additional losses in the future. This was due to the decrease in revenue of 21.51% and new vehicle sales by 24.36%, which were primarily attributable to the higher discounts offered to customers to sell entire stock of Bharat Emission Stage IV engine vehicles and effects from the COVID-19 pandemic.
The Offer Price, market capitalization to revenue multiple and price to earnings ratio on the Offer Price of our Company and return on net worth may not be indicative of the market price of the Equity Shares on listing or thereafter. Its return on equity ratio and return on capital employed have fluctuated in the three months ended June 30, 2022 and in Fiscal 2022, Fiscal 2021 and Fiscal 2020.
In the three months ended June 30, 2022 and in Fiscal 2022, Fiscal 2021 and Fiscal 2020, ROE was 6.72%, 26.66%, 6.11% and (17.03%), respectively, and ROCE was 3.67%, 18.86%, 8.59% and 1.07%, respectively. We may not be able to maintain higher ROE and ROCE in the future.
Business Risk:
The Company is subject to the significant influence of, and restrictions imposed by OEMs pursuant to the terms of our dealership or agency agreements. Its dealership agreements with Honda, Volkswagen, Jeep, Renault and Ashok Leyland and agency agreement with Mercedes-Benz will expire within the next three years. Their contribution to the total Revenue from sale of cars during the three months ended June 30, 2022 and Fiscal 2022 was 77.77% and 77.40%, respectively. It may not be able to renew these agreements on attractive terms or at all which may significantly impact our revenues.
Geographical Concentration Risk:
Its business operations are concentrated in the states of Gujarat and Maharashtra. In the three months ended June 30, 2022 and in Fiscal 2022, Fiscal 2021 and Fiscal 2020, 50.32%, 50.64%, 52.41% and 52.25% of its number of new vehicles sold and 49.41%, 48.77%, 50.77% and 47.87% of its total
Consolidated revenue from sale of cars was derived from dealership operations in Gujarat and 22.59%, 24.50%, 24.61% and 23.60% of its vehicle sales and 20.88%, 25.54%, 23.47% and 25.12% of total consolidated revenue was derived from dealership operations in Maharashtra.
Competition Risk:
Most of our dealership agreements do not grant us the exclusive right to sell vehicles manufactured by the OEMs within a given geographic area. We may not be able to expand into new territories where other dealers have exclusive dealerships.
