Landmark Cars Limited IPO Company Profile:
Landmark Cars Limited is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault, it also caters to the commercial vehicle retail business of Ashok Leyland in India. The company has a presence across the automotive retail value chain, including sales of new vehicles, after-sales service, repairs, pre-owned passenger vehicles, and facilitation of third-party finance and insurance products.
Landmark Cars Limited started its operations and opened its first dealership for Honda in CY1998, and since then has expanded its network to include 112 outlets in 8 Indian states, comprised of 61 sales showrooms and outlets and 51 after-sales services and spares outlets, as of September 30, 2021. The company is focused on the premium and luxury automotive segments. CRISIL Research expects the premium segment to grow at a CAGR of 10-12% CAGR from Fiscal 2021 to Fiscal 2026, while the luxury segment is expected to grow at a CAGR of 20-22% during the same period.
Landmark Cars Limited was the number one dealer in India by sales volumes of new vehicles for Mercedes-Benz(in Fiscal 2021), Honda (in Fiscal 2021), Volkswagen (in CY 2020), and Stellantis (Jeep) (in Fiscal 2021), and was the third largest dealer by sales volume for Renault (in CY2020).
As an Expansion plan into Pure EV Sales, Landmark Cars Limited has signed a letter of intent with the automaker BYD, a leading player in the global EV market, for the Company to be their dealer in Mumbai and the National Capital Region (Delhi) in respect of their electric passenger vehicles.
|IPO-Note||Landmark Cars Limited|
|Rs. 481 – Rs. 506 per Equity share||Recommendation: Aggressive Investors can Apply|
Landmark Cars Limited IPO Details:
|Objects of the issue|| · To repay the borrowings of its subsidiary
· To gain the listing benefits
|Issue Size||Total issue Size – Rs.552 Cr.
Fresh Issue – Rs. 150 Cr.
Offer for Sale – Rs. 402 Cr.
|Face value||Rs. 5.00 Per Equity Share|
|Issue Price||Rs. 481 – Rs. 506|
|Bid Lot||29 Shares|
|Listing at||BSE, NSE|
|Issue Opens||13th Dec, 2022 – 15th Dec, 2022|
|QIB||50% of Net Issue Offer|
|Retail||35% of Net Issue Offer|
|NIB||15% of Net Issue Offer|
Landmark Cars Limited IPO Revenue from operations:
|Segment||6M FY-22(in cr.)||%||FY-21(in cr.)||%||FY-20(in cr.)||%||FY-19(in cr.)||%||CAGR|
|Sale of cars||1142.99||80.90%||1480.34||75.68%||1686.88||76.03%||2295.16||81.20%||-13.6%|
|Sale of spares, lubricants and others||164.37||11.63%||290.67||14.86%||336.09||15.15%||329.85||11.67%||-4.1%|
|Sale of services||78.65||5.57%||132.28||6.76%||144.55||6.52%||130.37||4.61%||0.5%|
|Revenue from sale of products and services||1386.01||98.10%||1903.30||97.30%||2167.52||97.70%||2755.37||97.48%||-11.6%|
|Other operating revenues||26.83||1.90%||52.81||2.70%||51.10||2.30%||71.14||2.52%||-9.5%|
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Landmark Cars Limited IPO Financial analysis:
|Particulars||6M FY-22(in cr.)||FY-21(in cr.)||FY-20(in cr.)||FY-19(in cr.)||CAGR|
|Revenue from sale||1412.84||1956.10||2218.61||2826.52||-11.5%|
|Cost Of Goods Sold||1221.36||1647.37||1894.88||2462.53|
|Profit/Loss before tax||28.33||19.78||-24.64||-17.55|
|Profit/Loss after tax||27.95||11.15||-28.94||-24.43|
Pre-Offer shareholding of the Selling Shareholders:
|S. No.||Name of the Selling Shareholder||Number of Equity Shares held on a fully diluted basis||Percentage of equity share capital on a fully diluted basis (%)|
|2.||Sanjay Karsandas Thakker HUF||757,722||2.07%|
Landmark Cars Limited IPO Offer for Sale Details:
|S. No.||Name of the Selling Shareholder||Offered Shares in (₹ crores)|
|1.||TPG Growth||Up to ₹ 400 crores|
|2.||Sanjay Karsandas Thakker HUF||Up to ₹ 62 crores|
|3.||Aastha Limited||Up to ₹ 120 crores|
|4.||Garima Misra||Up to ₹ 30 crores|
Landmark Cars Limited IPO Strengths:
Landmark Cars Limited’s longstanding relationships with its partners and its market leadership positions offer the company several competitive advantages like sharing infrastructure and manpower across brands to increase margins; attracting suitable inorganic dealership acquisition targets (with the support of the OEMs); opportunities to expand across the business verticals like after-sales service, sales of pre-owned vehicles and sales of financial and insurance products; attracting talented sales and technical personnel; executing large scale marketing and advertising campaigns, and centralizing certain backend and support functions all of which leads to economies of scale and margin improvement.
Landmark Cars Limited’s after-sales service and spares business provides a stable revenue stream and contributes to higher-margin revenues at each of its dealerships, which helps mitigate the cyclicality that has historically impacted some players of the automotive sector.
Landmark Cars Limited’s OEMs offer manufacturers’ warranties and maintenance programs packaged with vehicle sales and, generally, only permit warranty work to be performed at their authorized service centers such as the company’s. This creates a barrier to entry for new competitors.
Despite a decline in revenues from operations between Fiscal 2019 and Fiscal 2021, in line with industry trends, the operations of the company continued to be profitable during this period.
- LCL is one of the leading automotive dealership for major OEMs being the top dealer in India for Mercedes in terms of retail sales and top dealer in India for Honda and Jeep in terms of wholesale sales in FY22.
- The company has no listed peer in the car dealership business which gives it a competitive edge.
- The financials of the company is growing backed by experienced promoter and professional management team.
Landmark Cars Limited IPO Risk factors:
The decision by any of Landmark Cars Limited’s OEMs not to renew, terminate or require adverse material modifications to any of the dealership or agency agreements entered into with them could have a material and adverse effect on the business, results of operations, and financial condition. In particular, Mercedes-Benz has required that the company restructure its dealership arrangement with them to an agency model. The company can make no assurances that its business, results of operations, and financial condition will not be adversely affected by this change.
Landmark Cars Limited’s investments in building its pre-owned vehicle business and establishing a new electric passenger dealership with BYD may not be successful and maybe loss-making.
A large portion of Landmark Cars Limited’s business operations are concentrated in the states of Gujarat and Maharashtra, and any adverse developments in these states could have an adverse effect on the business, results of operations, and financial condition of the company.
Landmark Cars Limited is subject to the significant influence of, and restrictions imposed by OEMs pursuant to the terms of the dealership or agency agreements that may adversely impact the business, results of operations, financial condition, and prospects, including its ability to expand into new territories and acquire additional dealerships.
- Any changes in the dealership agreements by the OEMs can affect the business operations of the company.
- The business of the company largely depends on the success of the OEMs, any failure of these OEMs to compete effectively in India could adversely affect the business of the LCL.
- Around 70% of the revenue of the company is generated from the states of Gujarat and Maharashtra, any adverse development in these states could affect the operations of the company.
Landmark Cars Limited IPO Key Highlights:
- Revenue of LCL is growing gradually with a CAGR of 10.3% from Rs.2218.6 Cr. in FY20 to Rs.2977 Cr. in FY22.
- Net Profit of the company improved from the loss of Rs.28.94 Cr. in FY20 to the profit of Rs.66.18 Cr. in FY22 with the PAT margin of 2.2% in FY22.
- Net cash flow of the company was in negative at Rs 45.4 Cr. in FY20 and improved further to Rs. 49.78 Cr in FY22.
- ROE was 26.66% and Net Debt to Equity was 1.13 in FY22.
LCL is enjoying as the leader in the premium automotive retail segment and is also providing after sales services. It generated 78.8%, 1.1%, 13.7% and 6.5% of revenue from Sales of cars, Commission income, Sale of spares, lubricants and Sales of services respectively. As an Expansion plan into Pure EV Sales, it has formed a partnership with the automaker BYD, a leading player in the global EV market, to sell electric passenger vehicles in the Delhi NCR and Mumbai. The business of the company is focused on the fast-growing premium and luxury segments of the Indian passenger vehicle market and according to CRISIL Research, the premium segment is expected to grow at a CAGR of 10-12% from FY21 to FY26, while the luxury segment is expected to grow at a CAGR of 20-22% during the same period. The company is further expanding it’s after sales service business which is generating higher margin than the sales of cars at the showroom. The CRISIL Research expects the share of revenue from services to expand going forward due to the technical expertise needed to repair the latest advanced vehicles that only organized dealerships can provide. LCL is offering the PE of 30.27 times on the basis of FY22 earnings on the upper price band. Analyzing all the parameters, only aggressive investors are advised to apply, otherwise skip.
Objects of the Offer:
Landmark Cars Limited proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:
- Repayment/pre-payment, in full or in part, of certain borrowings availed by the Company and Subsidiaries; and
- General corporate purposes.
Landmark Cars Limited IPO Prospectus:
- Landmark Cars Limited IPO DRHP –
- Landmark Cars Limited IPO RHP –
Registrar to the offer:
Link Intime India Private Limited
C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli West
Mumbai – 400 083, Maharashtra
Phone: +91 22 4918 6200
Landmark Cars Limited IPO FAQ
Ans. Landmark Cars IPO is a main-board IPO of 10,909,091 equity shares of the face value of ₹5 aggregating up to ₹552.00 Crores. The issue is priced at ₹481 to ₹506 per share. The minimum order quantity is 29 Shares.
The IPO opens on Dec 13, 2022, and closes on Dec 15, 2022.
Ans. The Landmark Cars IPO opens on Dec 13, 2022 and closes on Dec 15, 2022.
Ans. The minimum lot size that investors can subscribe to is 29 shares.
Ans. The Landmark Cars IPO listing date is not yet announced. The tentative date of Landmark Cars IPO listing is Dec 23, 2022.
Ans. The minimum lot size for this upcoming IPO is <> shares.