Jobaaj Stories
Luxury car retailer Landmark Cars joined the ranks of listed companies on Friday as the company's shares made an unsatisfactory debut on the Indian exchanges.
Landmark Cars is a leader in the premium automotive retail business and manage dealerships for several international brands like Mercedes, Honda, Volkswagen, Jeep, and Renault. The company, which began services in 1998, also offers certain services such as new vehicle sales, after-sales services, and repairs.
The company has 112 outlets in 8 Indian states, comprising 61 sales showrooms and outlets and 51 after-sales services and spare outlets, as of September 30, 2021.
Before the company floated its Rs 552 crore IPO, it raised Rs 165.30 crore from anchor investors. 14 investors, including HDFC Mutual Fund, Nippon Life India, Goldman Sachs, Aditya Birla Sun Life, Pinebridge Global Funds, Edelweiss, Maven India Fund, BNP Paribas Arbitrage, Resonance Opportunities Fund, and Morgan Stanley, participated in the company's anchor book.
The IPO saw good participation, particularly from QIBs whose portion was subscribed 8.71x times! HNIs and Riis showed fair interest as their portions were subscribed 1.32x and 0.59x times, taking the total subscription to 3.06x times!
Market observers noticed that the stock was available at a discount of Rs 5 per share, or around 1% before it's listing. This prompted analysts to expect a muted listing with a chance of listing losses.
In line with analysts' expectations, the stock listed at a price of Rs 471 on Friday, a discount of 6.9%! Buyers tried to push the price as it touched a high of Rs 481.15. The stock was unable to reclaim it's cost as it fell under the selling pressure.
The stock made a low of Rs 446.20 per share during the day, but buyers managed to put up some resistance as they pushed up the price for it to close at Rs 458.40 per share, down 2.7% on an intraday basis.
The investment of Rs 14,674 per lot (29 shares x Rs 506 per share) declined to Rs 13,294 (29 shares x Rs 458.40 per share), down 9.4% on listing day.
Contrary to the listing losses, analysts feel the stock can yield good returns when the Covid-19 fears subside. Brokerages are suggesting clients to keep the stock for a few months while fresh investors have been told to wait for further correction.
Article by Aman Agarwal.
