The initial public offering (IPO) of automobile dealership chain Landmark Cars was subscribed 22 per cent on Day 2 of the bidding process. The issue received total bids of 17,74,336 shares against the issue size of 80,41,805 shares. The employee quota was fully subscribed (1.53 times), the portion reserved for retail individual investors (RIIs) was booked 24 per cent and that of non-institutional investors (NIIs) received 46 per cent subscription by 11:21 am on Wednesday. However, the qualified institutional buyers (QIB) portion failed to attract any bids so far.
The three-day issue would conclude on December 15. The company has fixed a price band of Rs 481-506 per share for its Rs 552 crore initial share sale.
The public issue consisted of a fresh issue of equity shares aggregating to Rs 150 crore and an offer-for-sale (OFS) of up to Rs 402 crore.
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TPG Growth II SF PTE Ltd, Sanjay Karsandas Thakker HUF, Aastha Limited and Garima Misra would be among those offloading shares through the OFS route.
Landmark Cars said proceeds from its fresh issuance would be utilised for debt payment and general corporate purposes.
Half of the issue size has been reserved for qualified institutional investors, 35 per cent for the retail investors and the remaining 15 per cent for non-institutional investors.
The lot size of the IPO is 29 shares, for which one would have to spend Rs 14,674. A retail individual investor can submit bids for up to 13 lots or 377 shares by spending Rs 1,90,762.
“The company’s strategy is to broaden its after-sales service offering in order to serve more customers and increase its higher-margin service and repair revenues. Based on annualised FY23 earnings, the IPO is priced at a post-issue P/E of around 27 times,” Manan Doshi of UnlistedArena.com, dealing in unlisted & pre-IPO shares, told Business Today.
Arihant Capital said Landmark Cars is well placed in its target markets with little threat from bigger players.
Grey market premium
Market participants said Landmark Cars IPO grey market premium (GMP) was last heard at Rs 11, up from Rs 8 on Tuesday and down from Rs 30 on Monday. It implied that the grey market expected the company to stage a decent listing.
TPG-backed Landmark Cars is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault.
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The company reported a loss of Rs 28.93 crore in fiscal 2020. Axis Capital and ICICI Securities are the book-running lead managers to the issue.