Droom files to raise  Rs 3,000 cr via IPO
Photo Credit: VCCircle

Online automobile marketplace Droom Technology Pvt. Ltd. has filed the necessary paperwork with the Securities Exchange Board of India (SEBI) to raise Rs  3,000 crore in an initial public offering (IPO).     

The issue comprises a primary capital raise of Rs 2,000 crore, while the promoter entity Droom Pte. Ltd., backed by investors like Beenext and Lightbox, will sell shares worth Rs 1,000 crore through a secondary offer-for-sale.   

The company may raise up to Rs 400 crore through a pre-IPO round upon consultation with the book running managers. Any amount raised in the pre-IPO round will be reduced from the primary portion of the offering.   

The company will use ~ Rs 1,150 crore of the net proceeds towards organic growth initiatives, ~ Rs 400 crore towards inorganic growth, and the remaining proceeds for general corporate purposes.   

Droom’s net sales reduced by over one-fourth from Rs 172.17 crore in FY20 to  Rs 125.33 crore in FY21,  lower than net sales of Rs 136 crore reported in FY19.   

However, the company managed to curtail its losses from Rs 105.37 crore in FY19 to Rs 89.6 crore in FY20, and further to Rs 68.88 crore in FY21.   It has reported net losses of Rs 32.59 crore against net operational revenues of Rs 79.08 crore during the quarter ended June 30, 2021.  

ICICI Securities, Edelweiss Financial Services, Axis Capital, HSBC Securities and Nomura Financial Advisory and Securities (India) are the book running lead managers to the issue (BRLMs).    

 J. Sagar Associates is the legal counsel and the selling promoter for the company. Trilegal and Hogan Lovells Lee & Lee will act as legal counsel for the BRLMs.   

The Gurgaon-based platform operates as a wholly-owned subsidiary of Singapore-based Droom Pte. Ltd. that joined the elite unicorn club in July when it raised $200 million in a pre-IPO round from new and existing investors.   

Droom facilitates  the online buying and selling of automobiles and competes with the like of Cars24 and CarTrade. 

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