Landmark Cars Plans to Take the IPO Route to Raise Over Rs. 800 crore

Automobile dealership chain Landmark Cars plans to file a draft red herring prospectus (DRHP) in the coming weeks to raise over Rs. 800 crores through an initial public offering, said people aware of the company’s plan.

Axis Capital and ICICI Securities have been appointed as the lead managers for the proposed issue, they said.

TPG- backed Landmark Cars is India’s biggest seller of premium vehicles of automakers Mercedes Benz, Volkswagen, Honda and Fiat Chrysler. It is likely to be first automotive dealership company in India to float an IPO and is also the first such firm to have received private equity investment.

Globally, there are multiple large auto retail chains that are listed. India is likely to see a similar trend, say experts.

The IPO will offer TPG a chance to sell a part of its stake in the company, said the people cited earlier. The proceeds from may be used for expansion, they said.

An email sent to Landmark Cars did not elicit any response till the press time.

TPG had invested around Rs. 140 crores in the company in FY15. Since it came on board, Landmark Cars’ business has more than double – from retailing about 10,000 vehicles through 41 outlets at the end of FY15, sales grew to 20,000-25,000 cars at FY20- end, giving an annual turnover of Rs. 2,500-3,000 crore.

Apart from being the biggest seller of Mercedes Benz, Volkswagen, Honda and Jeep vehicles in the country, it is also the third biggest retailer of Renault cars in India. The company operates over 110 outlets across eight states. It is in business of sale of new vehicles (passenger as well as commercial), after sales service and sales of pre-owned passenger vehicles. It also facilitates sale of third-party financial products, including insurance policies and vehicle finance.

“It is a debt-free company and it believes in having an asset-light model to run its operation, which was the key reason why TPG decided to invest in the company,” said one of the persons cited earlier. “Landmark also separated management from ownership. It is considered as one of the most professionally run automotive retail businesses, unlike family-run business in India.”

The company recently entered into a partnership with global EV giant BYD to sell its electric vehicles in Mumbai and the NCR, which is seen giving the company the early mover advantage in the emerging electric vehicles space. S-ET

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