Landmark Cars IPO is set to enter the Indian Exchanges with plans to file Draft Red Herring Prospectus (DRHP) in the coming weeks. The automobile dealership chain is planning to raise ₹800 crore through an initial public offering.
TPG-backed Landmark Cars Limited is India’s biggest seller of premium vehicles like Mercedes Benz, Volkswagen, Fiat Chrysler, and Honda. Predicted to be the first automotive dealership companies in India to offer an IPO, it is also the first automotive dealership company to receive private equity investment.
The IPO will offer private equity company TPG a chance to sell a part of its stake in the company. The objectives of the IPO will be to utilize the proceeds from the IPO for expansion and general corporate purposes. TPG had invested around ₹140 crores in Landmark Cars in FY15. With its entry into the automobile dealership chain Landmark Cars business has more than doubled. The sales grew extensively from 20000 to 25000 cars at the end of FY20, with an annual turnover of ₹2,500-3,000 crore.
Starting its operations in 1998, led by Sanjay Thakker, Landmark Cars Limited has operations in more than 110 outlets across eight states in India. It also provides services like insurance policies and vehicle finance. It is the biggest seller of Mercedes Benz, Volkswagen, Honda, and Jeep. It is also the third biggest retailer of Renault cars in India.
One of the key factors about Landmark Cars IPO is it being a debt-free company and the company believes in having an asset-light model to run its operation. Considered as one of the most professionally run automotive retail businesses, the company recently entered into a partnership with global EV giant BYD to sell electric vehicles in Mumbai and the NCR.
The market for premium and luxury cars is expected to grow by 10-15% in the next five years which gives a positive sign for the TGP-backed company. Landmark Cars being the biggest seller of premium vehicles also has a sister company, called Policy Boss. The company is the biggest auto insurance broking firm in the country selling close to 6-7 lakh insurance policies per year.
With the pandemic around for almost 2 years now and a negative compounded annual growth rate in the last five years, the Indian automobile market is waiting for a strong bounce-back.
Check Here for Landmark Cars IPO details.
Axis Capital Limited and ICICI Securities are the book-running lead managers for the IPO.