Droom Technology Limited is among India’s major e-commerce platforms for used car sales, providing a 21st-century e-commerce experience for autos. Droom IPO will hit the stock market in February 2021.
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About Droom
They are a technology and data science firm that helps people buy and sell cars online using a mix of their asset-light automobile e-commerce platform and a technology-driven vertically integrated proprietary ecosystem of automotive products and services.
They are the only major Indian operator with a fully online transactional approach, and they have one of the biggest inventories of autos among the major online companies in India, with over 1.15 million vehicles listed, including both old and new cars, twowheelers, and other vehicles.
Their automotive e-commerce platform allows customers to buy and sell new and used cars with ease and a customised experience.
Market opportunity
For used autos, the current online penetration rate is 1%. In India, it is estimated that four out of every five persons thinking buying a car will do it online.
They were able to take advantage of this market opportunity by combining their use of technology and data science with their asset-light company model.
They started their operations in 2014 with an Android mobile app that only allowed auto dealers to buy and sell used vehicles in Delhi-NCR.
Since then, they’ve expanded their platform to include over 11 vehicle categories, including new and used vehicles, sold by auto dealers and specific sellers in 1,151 cities across India via their Android, iOS, M-site, and website.
Solutions
They offer a platform for buyers and sellers to transact autos and related solutions as a pure-play automobile e-commerce company.
They established a platform that aims to give a large selection, reasonable prices, inspected and verified vehicles, loan and insurance, and seamless delivery for purchasers as one unified Droom experience to solve structural limits of the automobile market and buyers and sellers pain points.
They offer an end-to-end e-commerce solution for used vehicle dealers and individual sellers that includes a technology platform, virtual catalogue, online payment, vehicle inspection, certification service, and vehicle delivery service, in addition to being able to reach out to a potential buyer online.
Droom IPO
Droom technology Limited, headquartered in gurugram has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of INR 3,000 crores on 11 November 2021.
The offer includes fresh issue of 2000 crores and there is offer for sale (OFS) of 1,000 crores by the promoters mentioned in the DRHP. They are looking for pre-IPO placement of 400 crores in this issue.
They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.
Financials Trends
| Particulars | For the year/period ended ( in Cr.) | ||||
|---|---|---|---|---|---|
| 30-Jun-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | ||
| Total Assets | 170.41 | 114.84 | 136.48 | 129.03 | |
| Total Revenue | 81.05 | 135.52 | 181.37 | 146.11 | |
| Profit After Tax | (32.58) | ( 68.88) | ( 89.60) | (105.37) | |
Basic and Diluted Earnings Per Share
| Financial Period | Basic EPS (in INR) | Diluted EPS (in INR) | Weight |
| Financial Year 2021 | (5.21) | (5.21) | 3 |
| Financial Year 2020 | (7.04) | (7.04) | 2 |
| Financial Year 2019 | (10.12) | (10.12) | 1 |
| Weighted Average | (6.64) | (6.64) | |
| 30 Jun. 2021 | (2.42) | (2.42) |
Objects of the Issue
- Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
- To meet common corporate objectives.
Basis of the offer
The following are some of the key variables and organizational strengths that contribute into determining the Offer Price:
- In terms of pure-play vehicle e-commerce platforms, they are the market leader.
- A technology and data science firm that provides exceptional value to the whole automotive value chain.
- Inventive ecosystem products and solutions based on proprietary technology.
- The network effect is driven by scale.
- Unit economics are strong, there is a lot of operating leverage, and the company has a good financial profile.
- Excellent management team lead by the founder
Droom IPO Peer Comparison
| S. No. | Face Value | Company Name | PE |
| 1 | 10 | Cartrade Tech Limited | 62.42 |
Note:
- From the NSE portal, the closing price of these equity shares on October 29, 2021.
- All financial data for listed industry peers is consolidated (unless otherwise stated) and derived from the respective firm’s annual results/reports for the fiscal year ended March 31, 2021.
Droom IPO Details
| IPO Opening Date | February 2021 |
| IPO Closing Date | February 2021 |
| Issue Type | Book Building |
| Face Value | 1 per share |
| IPO Price | 0 to 0 per equity share |
| Market Lot | – |
| Min Amount | – |
| Listing At | BSE, NSE |
| Issue Size | 3,000 Crores |
| Fresh Issue | 2,000 Crores |
| Offer for Sale | 1,000 Crores |
Droom IPO Date
Droom IPO opening date is February 2021, and the closing date is February 2021. The Droom technology issue may list in February 2021.
| IPO Opening Date | February 2021 |
| IPO Closing Date | February 2021 |
| Basis of Allotment Date | February 2021 |
| Initiation of Refunds | February 2021 |
| Credit of Shares to Demat Account | February 2021 |
| IPO Listing Date | February 2021 |
Basis of Allotment
| Type | % of Offer | Basis of Allotment |
|---|---|---|
| Qualified Institutional Buyer | 75 |
Roughly
equivalent
|
| Non Institutional Investor | 15 |
Roughly
equivalent
|
| Retail | 10 | Minimum level of 1 lot, based on availability, for every shareholder. |
Droom IPO Allotment Status
Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.
Here, you can find the Allotment Status of Droom technology IPO.
Droom IPO GMP
Droom IPO Grey Market Premium is 0. You can check out GMP of Other IPOs on below Links:
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Droom IPO Review
Droom IPO review will depend on the price band which will be announced after SEBI approval. Whenever it will be announced we will update you regarding review of Droom IPO is good or bad.
Droom IPO Risk
- The COVID-19 pandemic has had and will continue to have a negative impact on their business.
- For crucial business functions, they rely on their unique technology.
- If they have a cyber security breach, their reputation could suffer, and demand for their platform and services could fall.
- Their business is also exposed to risks associated with India’s e-commerce market for used and new automobiles and vehicle services, including industry-wide and macroeconomic risks.
- Their business relies on auto dealers that are eager to transact through their platform.
- Sandeep Aggarwal, their CEO and Promoter, was accused with criminal insider trading charges, which were later dropped.
Other Threats
- They intend to use the Net Proceeds to make purchases for which no specific targets have been determined.
- Any change in how the Net Proceeds are used would be subject to various compliance obligations, including shareholder approval in advance.
- They collaborate with outside service providers. Third-party service providers’ actions are beyond their control and could have a material and negative impact on their business.
- The costs they charge for transactions on their platform may fluctuate or reduce in the future, and any significant reduction in these service fees may be detrimental to their business.
- A large outage on their website or mobile application could harm their reputation.
Business Approach
With 278,807 used vehicles posted online, they are among the major players in terms of the quantity of vehicles listed online. They have one of India’s biggest dealer networks. Their platform enables buyers to easily choose and purchase a vehicle that meets their specific needs.
To create a superior end-to-end experience and to build trust in a fragmented and unorganised market, they provide customers with access to multiple ecosystem tools on their platform.
Buyers can use OBV to research and analyze a vehicle, purchase and verify historical vehicle records such as ownership, service, insurance, and insurance claim records, and use History to purchase and authenticate historical vehicle records such as ownership, service, insurance, and insurance claim records.
Benefits for Auto Dealers
As of September 30, 2021, they provide car dealers with direct access to over 177.62 million prospective traffic in 1,151 cities across India, allowing them to sell their automobile anytime and anywhere.
They help sellers increase the marketability of their vehicles by assisting them with digital cataloguing, pricing, inspection, and last-mile delivery at a low transaction cost and faster trade velocity.
Auto dealers who list on their platform benefit from more visibility with buyers, broader distribution, and higher yields.
As purchasers’ preferences for digital interactions via online channels expand (Source: GT Report), this becomes a vital enabler for the auto dealers’ companies to flourish.
Platform
As an automobile e-commerce company, they not only use technology to source and sell vehicles digitally, but they also provide proprietary and technology-driven services such as vehicle certification, loan and insurance, and vehicle delivery.
They’ve constructed a big-scale, asset-light, data science-driven ecosystem centred on used cars for the transaction lifecycle, with a vast network.
Droom Discovery, a vehicle research tool, and Orange Book Value, a used vehicle price engine that has received over 450.72 million pricing queries since its start, are also available.
Their inspection service, ECO, includes more than 1,110 checkpoints for vehicle inspection, verification, and certification.
Droom IPO Brokerage views
- Yes Securities : Not Updated
- Choice Brokering: Not Updated
- Axis Securities: Not Updated
- IIFL Securities: Not Updated
- Trade swift: Not Updated
- Anand Rathi : Not Updated
- ICICI Securities: Not Updated
Droom IPO Subscription Status
| Date | Day | QIB | NII | Retail | Employees | Total Subscription |
| February 2021 | 1 | |||||
| February 2021 | 2 | |||||
| February 2021 | 3 |
Management
Sandeep Aggarwal, our founder, Promoter, Chairman, Whole-time Director, and Chief Executive Officer, has over 2 decades of experience in the technology and e-commerce space.
He has been recognised as among the 30 Influential Business Leaders 2017 by Insight Success, and has been recognised DigiXX Person of the Year by DigiXX Awards 2018, Digital Entrepreneur of the Year 2018 at Haryana Gaurav Award, and Business Leader of the Year 2018 by World Federation of Marketing Pvt. Ltd.
Their leadership team consists of individuals with high academic qualifications and considerable expertise in a variety of industries, including global technology corporations, consumer brands, and professional services firms.
Promoters
- Sandeep Aggarwal
- Droom Pte. Ltd.
Promoters’s Holding
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding |
Droom Prospectus
Contact Details
Droom Limited
90/31B, First Floor,
Malviya Nagar, New Delhi
110017, Delhi
Tel: +91 11 4040 4501
E-mail: [email protected]
Website: www.droom.in
Registrar
KFin Technologies Private Limited
Selenium Tower-B, Plot 31 & 32,
Gachibowli, Financial District,
Nanakramguda, Serilingampally,
Hyderabad – 500 032, Telangana, India
Tel: +91 22 4918 6200
E-mail: [email protected]
Website: www.kfintech.com
Lead Manager(s)
- ICICI Securities Limited
- Axis Capital Limited
- Edelweiss Financial Services Limited
- HSBC Securities and Capital Markets (India) Private Limited
- Nomura Financial Advisory and Securities (India) Private Limited
We hope we are able to answer all your questions about Droom IPO. If you don’t have a Demat account, open it now with Zerodha best trading app of India.
Disclaimer
The reference of IPO Grey Market Premium (IPO GMP) is only valid for the date specified in the header.
On the IPO Grey Market, we do not purchase or sell IPO forms.
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Do not subscribe to an IPO based solely on the premium price, as it may alter at any time before to the listing. Only consider the fundamentals of the companies when subscribing.
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Note:
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FAQ
Droom IPO Opening Date?
Droom IPO will open in February 2021.
Droom IPO Listing Date?
Droom IPO will list in February 2021.
Droom IPO GMP Today?
Droom IPO Grey Market Premium is INR 0 .
Droom IPO Allotment Date?
Droom IPO basis of allotment will be in February 2021.
Lot size for Droom IPO?
Lot size for Droom IPO is 0.
