Landmark Cars Ltd IPO opened for subscription today. Brokerage firms have differing opinions the IPO offer. The IPO issue will close on Thursday, December 15.
The company that houses dealerships of Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault fixed the price band at 481-506 rupees per share.
The public offering of equity shares with a face value of ₹5 consists of a new issue of equity shares totaling ₹150 crore, and an offer for sale (OFS) by existing shareholders of up to ₹402 crore.
The proceed from the fresh issue will be utilised by the company to repay or pre-pay loans of the company and its arms. The company would also use the funds for general corporate purposes.
What do brokerages say?
Since there are no listed firms in India that operate in a sector similar to the company's, the majority of brokerage houses are finding it challenging to gauge.
Brokerage house, Canara Bank Securities Ltd has advised to 'avoid' the IPO offer. According to the brokerage, there are no listed companies in India that engage in a business similar to that of the company.
"On valuation front, the company is available at 28.30x PE for FY22. The company does not have any listed peers in the similar business. We recommend to 'Avoid' the issue," said the brokerage in its report.
On the other side, brokerage Marwadi Financial Service has advised to 'subscribe' for the public offer of the company. The brokerage considers the business to be among the top auto dealerships for significant OEMs, with a strong emphasis on high-growth markets.
"Also, it is available at reasonable valuations considering the future growth potential of the company," added the brokerage.
Similarly, brokerage Ventura Securities Ltd too has recommended to 'Subscribe at the upper price band of ₹506' for the IPO.
Brokerage house, Choice Equity Broking Pvt Ltd is skeptical about the IPO issue, hence, advised to 'Subscribe with Caution'. It also believes the IPO to be aggressively priced.
"There are no comparable peers having business profile similar to Landmark Cars. At higher price band, the company is demanding an P/S multiple of 0.7x, which seems to be significantly higher than the international peers having almost similar business profile. Thus, we assign a 'Subscribe with Caution' rating for the issue," said the brokerage in its report.
Religare Broking has a 'Neutral' stance on the IPO offer, while Kotak Securities has not assigned any rating or price target to the stock.
