Indian luxury automobile dealer Landmark IPO is oversubscribed with threefold shares

Indian luxury auto dealer Landmark Cars Ltd.’s initial public offering, valued at 5.52 Billion Rupees ($66.71 Million) was well received on Thursday. However, analysts said that demand is still low.

Exchange data revealed that investors bid for 24.6million shares in the last day of bidding. This is 3.1 times more than the 8,000,000 shares available.

A 4.02 billion rupees offer was made to the company. The new issue, valued at 1.5 million rupees, was also offered. The company proposes to use funds raised by the fresh issue for debt repayments of up to 1.2 million rupees.

Landmark sells vehicles made by Mercedes-Benz, Jeep, STLA.MI, Volkswagen, Renault, and other brands.

Retail category subscriptions for the listing were terminated at 0.59 Times, and the price range of the issue was set at 481 to 506 rupees each share.

Saurabh Joshi (Marwadi Shares and Finance research analyst) stated that there are many IPOs open at the moment, which has split the liquidity available to investors. He also said the subscription numbers were “tepid”.

Joshi stated that investors are missing out on Landmark shares because demand for cars is increasing.

India’s biggest wine producer, Sula Vineyard, also got a lukewarm reaction to its IPO. Analysts noted that the market was not feeling it.

Landmark was founded in 1998 by a Honda dealer. It now operates in 112 locations in 8 states and the union territories. Four additional brands have been added to help it expand its presence in the rapidly-growing luxury vehicle market.

Analysts predict that utility vehicle (UV), volumes will grow. This is good news for Landmark, which has five UV specialists, especially sports version.

Brokers also warned that restrictions placed by partners can adversely affect its business, and impede its expansion plans into new markets.


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