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Droom Technology, an automobile e-commerce platform, is planning to raise Rs 3000 crore through Initial Public Offering.
The issue comprises of fresh issue of equity shares aggregating up to Rs 2000 crore and offer for sale aggregating up to Rs 1000 crore.
Company Summary
Droom Technology is an e-commerce platform and a data science company that helps consumers to buy and sell automobiles. The company’s business model is an asset-light model driven by technology and it has a vertically integrated proprietary ecosystem of products and services for the automobile industry.
The company offers one of the largest selection of automobiles among major online players in India with over 11.5 lakh vehicles listed on its platform that includes both used and new cars and two-wheelers and other vehicles, as of September 2021.
The company’s e-commerce platform can be accessed through their website and mobile apps, which offers users convenience and a curated experience to buy and sell new and used vehicles.
Consumers can also use a ton of features such as searching for a vehicle, creating buying requirements, price discovery, booking, certification to purchase and financing and doorstep delivery.
They have joined hands with various original equipment manufacturers (OEMs) to provide them with an online platform for the sale of their vehicles.
The company has also partnered with several financial institutions like YES Bank, Tata Capital, Muthoot Capital, etc. to to offer financing and insurance options to consumers.
Company Strength
- Droom is one of the leading automobile e-commerce platform in India.
- Diverse range of proprietary technology-driven ecosystem products and services such as Orange Book Value for vehicle pricing, ECO which is an AI-driven vehicle inspection service, History, Droom Credit and Droom Discovery.
- Scalable business model and robust unit economic.
- High operating leverage and steady revenue.
- Experienced management team led by the company’s founder.
Company Financials
Particulars | For the year/period ended (Rs in crore) | |||
30-Jun-21 (Quarterly) | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
Total Assets | 170.4 | 114.83 | 136.47 | 129.02 |
Total Revenue | 81.05 | 135.52 | 181.36 | 146.11 |
Profit After Tax | (32.58) | (68.88) | (89.6) | (105.37) |
Company Promoters
Sandeep Aggarwal and Droom Pte. Ltd. are the promoters of the company.
Purposes of the IPO
The net proceeds from the IPO will be utilised for the following purposes:
- The company will use about Rs 1150 crore to fund its organic growth objectives. This amount will be used to expand its footprint in Tier 3 and Tier 4 cities in India, and select countries internationally.
- In addition, the amount will also be used for marketing, branding and promotional activities including acquisition of new buyers, sellers and auto dealers as well as their retention. Finally, they will invest a part of Rs 1150 in upgrading their proprietary technology infrastructure and is ecosystem.
- It will also use about Rs 400 crore for funding its inorganic growth initiatives.
- General corporate purposes.