Droom Technology Limited IPO – Details

On 11 November 2021, Droom filed its DRHP with SEBI to raise Rs. 3,000 crores through a public issue. The IPO consists of an offer for sale worth Rs. 1,000 crores and a fresh issuance of shares amounting to Rs. 2,000 crores.

The promoters, namely Droom Pte Ltd and Sandeep Aggarwal, hold 100% of the company's stake. They may chalk out a private placement of shares worth Rs. 400 crores.

If the firm undertakes a pre-IPO placement, then there will be a reduction in the size of the fresh issue. The lead coordinators in the issue are Nomura Financial Advisory and Securities (India) Private Limited, HSBC Securities and Capital Markets (India) Private Limited, Edelweiss Financial Services, Axis Capital and ICICI Securities.

The chart below furnishes the other relevant details related to this offering:

Issue Type

Book Built

Listing at

BSE & NSE

Price Band

To be updated

Minimum Order Quantity

To be updated

Face Value

₹1

per equity share

Market Lot

To be updated

Issue Type

Book Built

Listing at

BSE & NSE

Price Band

To be updated

Minimum Order Quantity

To be updated

Face Value

₹1

per equity share

Market Lot

To be updated

Listing at NSE, BSE

Droom Technology Limited IPO Important Dates

IPO Open Date To be updated
IPO Close Date To be updated
Basis of Allotment Publication Date To be updated
Initiation Of Refunds To be updated
Credit Of Shares To
Demat Account
To be updated
Minimum Order Quantity To be updated

View all upcoming IPOs

About Droom Technology Limited

Founded in 2014, Droom is a data science and technology-driven online marketplace that sells and buys used as well as new automobiles. It has been the greatest auto website in India, with over 65% of the market share (automobile transactions) online. Besides, it is the third biggest e-commerce entity in the country with respect to GMV.

This platform is agnostic towards geography, condition, price, seller, and category. Droom has 3 pricing formats, i.e., auction, best price and fixed price and 4 marketplace formats, namely B2B, C2B, C2C and B2C. Interestingly, it offers various product categories from a bicycle to an aircraft and services such as auto loans, insurance, RSA and warranty. The company has filed the DRHP with SEBI and now awaits the market regulator’s approval to float its IPO.

Droom Technology Limited IPO Objectives

- The company will utilise Rs. 400 crores of the proceeds (net) to finance inorganic growth initiatives.
- It will use Rs. 1,150 crores of the proceeds (net) to finance organic growth initiatives.
- The balance amount will be set aside for general corporate purposes.

Why should you invest in Droom Technology Limited IPO?

Investing in this offering can be a favourable choice because of the following reasons:

  • The automobile sector of India, which comprises used and new vehicles and related services, is likely to grow at a compound annual growth rate of 16.4% within fiscal 2021-2026. Favourable government initiatives, increased disposable earnings and changing customer preferences for mobility will help drive the growth of the auto industry.
  • Droom has integrated more than 20,725 auto dealers across 1,151 cities in India. The sellers and auto dealers on this platform have facilitated more than 3.70 million automobile listings. The firm will continue to create services, tools and technology for auto dealers, helping them to adapt to new age e-commerce opportunities.
  • Since it commenced its business, Droom has expanded the platform by continuously including new services and products. It has been successful in building a well-informed design and engineering team for developing evolving solutions for the buyers, auto dealers and sellers.
  • Droom Technology has plans to expand internationally as well as domestically. It aims to assess and pursue acquisition opportunities and strategic investment throughout the auto value chain for complementing and supplementing its existing strategies and services.
  • With an expansion in the scale of its operations, there has been an improvement in unit economics. The firm’s scale has enabled it to minimise fixed infrastructure expenses (per-unit basis). Hence, its main focus is to grow in a sustainable and profitable manner.

Financial highlights

Refer to the financial performance of Droom Technology over the previous three years for a better understanding:

Financial Year Total Assets in Millions Total Income in Millions Profit After Tax in Millions
March FY 2021 Rs. 1,148.38 Rs. 1,355.23 Rs. 688.83
March FY 2020 Rs. 1,364.78 Rs. 1,813.68 Rs. 896.03
March FY 2019 Rs. 1,290.29 Rs. 1,461.11 Rs. 1,053.70

How to apply for Droom Technology Limited IPO?

Following are the procedures to apply for this auto giant’s offering:

Demat Account

  • Investors can also make their bids for this initial public offering using Demat accounts. They can open their Demat accounts for free through Angel One (app and portal). Next, they can apply for this offering or any other issue after signing in to their Demat accounts.
  • Besides, individuals who have their accounts with Angel One may click here in order to make their bids for the offering.

UPI

  • Avid investors can make their bids for the IPO of Droom using UPI IDs. Firstly, they need to link their bank accounts to the respective UPI IDs. Thereafter, they can link the UPI IDs to Angel One (trading platform).
  • After successful linking, they can select the UPI tab from the Angel One portal or application to opt for the public offering of Droom or the other organisations. Further, they may block the subscription amounts of the issue as and when needed through their corresponding UPI apps.

Droom Technology Limited IPO - Noteworthy Highlights

The following facts about Droom make the public issue of this company worthwhile for both prospective and veteran investors:

  • It is a purely online platform that facilitates five tech tools, namely Credit (for used automobile loans), Discovery (pre-buying tools), History (automobile history records), Eco (vehicle inspection), and Orange Book Value (pricing engine).

  • Droom Technology has witnessed an increase in the total count of app downloads to 14.20 million in FY 2021 from 12.85 million in FY 2019.

  • This firm has strong relations with certain NBFCs such as Bajaj Finance Ltd. and Tata Capital Financial Services Ltd.

  • The number of employees has increased to 286 on 31 September 2021 from 277 as of 31 March 2021.

Droom Technology Limited IPO - SWOT Analysis

Strengths

  • On 30 September 2021, Droom recorded a wide selection of used vehicles (278,807) listed throughout 11 categories.
  • It involves a sizeable technology team to enhance the online platform. Nearly 33.57% of the workforce is engaged in development and production.
  • The firm has high operating leverage and a stable and sound financial profile. The automobile order during FY 21, FY 20 and FY 19 were 45,444, 72,174 and 88,981, respectively.
  • Insight success has recognised Sandeep Aggarwal, founder of Droom Technology, as one of the 30 most eminent businessmen of 2017.

Weaknesses

  • COVID-19 pandemic or the associated lockdown can influence this business.
  • In the past, this entity has incurred losses and negative cash flows.
  • Maintaining reputation and brand image is crucial for the survival of this platform.

Opportunities

  • With plans of investments in infrastructure, data science, ecosystem and technology, there is a possibility for its growth in the future.
  • It aims to enter new geographies to expand its business.
  • Further, it will continue to enhance products and technologies involving IoT space, big data analytics and AI/ML.

Threats

  • This entity has litigation proceedings that can impact the brand image.
  • The dependency of the shareholders is somewhat high. So, any inconsistency in this regard can impact the growth of the company.
  • Improper maintenance of technology infrastructure may materially impact this business.
  • Highly dependent on the involvement of consumers in the online platform.
  • Changes in regulations and laws related to the e-commerce sector can hamper its operations.

Competitive Analysis: Market Peers

Go through the comparative analysis of Droom and its major competitors in the chart below:

Company Name Operating Revenue (in Rs. crores) PAT Margin
Droom 172.2 49.4%
Spinny 11.4 432.2%
Cardekho 706.3 43.4%
Cars24 2,998.1 9.3%
Car Trade Tech 298.3 9.8%

Droom Technology Limited IPO FAQs

What is the source of income for Droom?

Droom primarily makes money through commissions and subscriptions:
  • For new vehicles, it is a flat booking charge or a 1% - 1.25% fee.
  • In the case of used motorcycles, it is 2.5% - 3%.
  • For used cars, the commission differs from 2% to 2.5%.
  • Dealer subscriptions generate 15% of its revenue, ranging between Rs. 45,000 – Rs. 1,00,000.

Where are the subsidiaries of Droom?

Droom, a Singapore holding organisation, has its subsidiaries in the United States and India. The company’s headquarters is in Gurgaon, India.

Who are the major investors for Droom?

Some of the major investors of Droom are Integrated Asset Management, Joe Hirao, Toyota Tsusho Corporation, Digital Garage, Beenext Beenos and LightBox.

Has Droom acquired any company?

In 2019, Droom Technology acquired a company named Xeraphin Finvest Pvt. Ltd. to enhance its dealer credit marketplace and consumer base.

Who are the finance partners of Droom?

Droom has finance and credit partners, namely Lendbox, Cashkumar, Hero Fincorp, Faircent, Manappuram Finance, Tata Capital, Yes Bank and IDFC First Bank.

Enjoy Zero Brokerage on Stock Investments

Get the link to download the app

Enjoy Lifetime Free Delivery Trade

Download the app now

Or Scan below QR Code

to download App

Get Demat Account for Free