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Droom Technology Ltd IPO

Droom Technology Ltd IPO

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Strengths & Risks
30 second IPO
overview
Research Rating
Financials
Industry Trends
Key Strategies
Steps to Apply
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About the Droom Technology Ltd IPO

- A technology and data science company that facilitates automobile buying and selling online through a combination of an asset-light automobile e-commerce platform along with a technology-driven vertically integrated proprietary ecosystem of products and services for the automobile industry
- The automobile ecommerce platform, which includes website and mobile apps, offers users convenience and a curated experience to buy and sell new and used vehicles and encompasses every element of automobile buying from searching for a vehicle, creating buying requirements, price discovery, booking, certification to purchase and financing and doorstep delivery(Source: Company DRHP)

Strengths

Market leader in pure-play automobile e-commerce platform
The Indian automobile market is impacted due to expensive real estate, high cost of capital, low-trust market, inadequate enforcement of consumer protection laws, absence of large-format modern retail and an unorganized market with a fragmented seller base (Source: GT Report). As a purely online player, Droom is less susceptible to these impediments (Source: Company DRHP)

Technology and data science company offering a superior value proposition to the entire automobile value chain
The company leverages new-age technologies such as AI, ML, IoT, augmented reality (“AR”) and virtual reality (“VR”) and has adopted a data-driven consultative sales experience. They provide users with an intuitive interface on various platforms including on iOS, Android, M-Site, desktop and as a widget. As of September 30, 2021, Droom had 14.46 million cumulative downloads of the mobile app (Source: Company DRHP)

Scale driving network effect
The platform benefits from a virtuous cycle driven by scaled, digital platform and the data and technology leveraged every day. A larger seller base on the platform leads to more selection options and better price discovery for buyers. (Source: GT Report) This helps drive a better experience, greater user engagement on platform and accordingly, greater conversions thereby increasing user loyalty (Source: Company DRHP)

Risks

Depend on the proprietary technology for critical functions of the business
Failure to properly maintain or promptly upgrade technology may result in disruptions to or lower quality of services and business, results of operations and financial condition may be materially and adversely affected (Source: Company DRHP)

Business is dependent upon auto dealers willing to transact on the platform
A reduction in the number of auto dealers on platform would have a material adverse effect on the business, financial condition and results of operations (Source: Company DRHP)

Financials

Net Worth
Total Income
Loss after Tax
Total Borrowings

Industry Trends

- New Cars Market in India: India is the world’s 5th largest car market in the world by sales volume in 2020 and is expected to grow at the fastest rate among developing and developed nations, growing at a CAGR of 12.0% from Fiscal 2021 to Fiscal 2026. The car market is expected to grow owing to a decrease in the average duration of ownership driven by increasing disposable income and higher aspirations. The replacement cycle of cars in India has gone down from 55 months in 2006 to 40 months in 2019 (Source: Company DRHP)
- Used Cars Market in India: The used cars market in India is expected to grow from 4.1 million units in Fiscal 2021 to reach 10.9 million units by Fiscal 2026 at a CAGR of 21.8%. With the increasing acceptance towards the purchase of used vehicles there exists a significant potential for growth. The used car market in India was valued at ₹2,250 billion in Fiscal 2021 and is expected to grow to ₹4,544 billion by Fiscal 2026, growing at a CAGR of 15.1 % from Fiscal 2021.

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Select IPO

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Fill in the required details

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