Droom Technology, an emerging leader in the online automobile marketplace, is preparing for its Initial Public Offering (IPO). With a strong foothold in India’s e-commerce ecosystem and a proven technology-driven platform, Droom has garnered attention from investors. This blog provides all the essential details you need to know about the Droom IPO, including its financials, strengths, risks, and what investors can expect from this offering.
About Droom Technology Ltd.
Founded in 2014, Droom Technology Ltd. is a technology and data science-driven company that operates India’s largest e-commerce platform for buying and selling new and used automobiles. It offers a broad range of vehicle categories, including bicycles, cars, motorcycles, and even airplanes, through its B2B, B2C, C2B, and C2C formats.
The company, headquartered in Gurugram, Haryana, has expanded its services to Singapore, Thailand, and Malaysia. Droom’s platform offers an end-to-end solution, covering everything from vehicle search, booking, certification, and financing, to doorstep delivery.
In July 2021, Droom raised $200 million in a pre-IPO funding round, valuing the company at $1.2 billion, making it one of India’s emerging unicorns. Droom’s innovative approach has enabled it to capture a significant share of the automobile market, making it one of the biggest e-commerce players in India.
Droom IPO Details
Droom is expected to raise ₹3000 crore through its IPO, which is a combination of a fresh issue of ₹2000 crore and an offer-for-sale (OFS) of ₹1000 crore. The IPO is expected to be a book-built issue, but the price band has yet to be announced. The listing date is tentatively set for the third week of June 2025.
| Particulars | Details |
| IPO Size | ₹3000 crore |
| Fresh Issue | ₹2000 crore |
| Offer for Sale | ₹1000 crore |
| Price Band | To be announced |
| Issue Type | Book-built issue |
| IPO Open Date | Mid of June 2025 (Tentative) |
| IPO Close Date | Mid of June 2025 (Tentative) |
| Listing Date | Last week of June 2025 (Tentative) |
| Registrar | Kfin Technologies Limited |
Droom IPO Objectives
The funds raised through the Droom IPO will be primarily used for:
- Organic Growth Initiatives: To improve the platform and expand Droom’s existing services.
- Inorganic Growth Opportunities: To fund acquisitions and strategic investments throughout the auto value chain.
- General Corporate Purposes: For expansion and strengthening the company’s market presence.
Why Should You Invest in Droom IPO?
Droom’s IPO presents a promising investment opportunity due to several factors:
- Fast-Growing Indian Automobile Market: The Indian automobile sector, encompassing new and used vehicles, is expected to grow at a CAGR of 16.4% from 2021 to 2026. The sector’s growth is supported by increasing disposable income, government initiatives, and shifting customer preferences for mobility.
- Impressive Market Reach: As of September 2021, Droom had over 278,807 used vehicles listed across 1,151 cities in India, with a growing footprint in international markets.
- Diverse Offerings: The platform operates across B2C, C2B, C2C, and B2B formats and provides services such as auto loans, insurance, and warranty, making it a one-stop solution for automobile transactions.
- Strong Technology Platform: Droom’s in-house development of services like AI-based vehicle inspection and Droom Credit positions the company as a leader in automobile e-commerce.
- Strong Growth and Leadership: Droom’s founder, Sandeep Aggarwal, has been recognized as one of India’s top business leaders. The company’s leadership, technological investments, and innovative business models make it a strong contender in the growing automobile marketplace.
Droom IPO Financials
Droom’s financial performance highlights both opportunities and risks. The company has shown solid growth in revenue but has faced challenges in terms of profitability, which is common for tech-based startups. Below are the key financials:
| Financials (₹ Cr) | FY 2021 | FY 2020 | FY 2019 |
| Total Assets | ₹1,148.38 | ₹1,364.78 | ₹1,290.29 |
| Total Income | ₹1,355.23 | ₹1,813.68 | ₹1,461.11 |
| Profit After Tax (PAT) | ₹688.83 | ₹896.03 | ₹1,053.70 |
| Net Profit | ₹-128.55 | ₹-88.83 | ₹-66.21 |
| Adjusted EPS | ₹-5.21 | ₹-0.67 | ₹-1.23 |
Operational Performance
Droom has shown consistent growth in the number of auto dealers, vehicle listings, and its GMV (Gross Merchandise Value). As of September 2021, Droom’s GMV stood at ₹5,024.72 crore, underlining its vast market potential.
| Key Indicators | As of 30 September 2021 |
|---|---|
| Number of Auto Dealers | 20,725 |
| Traffic | 8.09 million |
| Number of Cities | 1,151 |
| Number of Vehicles Listed | 278,807 |
| GMV | ₹5,024.72 crore |
Droom IPO Analysis
Strengths:
- Leading Position: Droom is India’s top player in automobile e-commerce, leading the market in GMV.
- Large Technology Team: 33.57% of Droom’s workforce is dedicated to platform development, ensuring continuous technological innovation.
- Patented Solutions: Droom holds a U.S. patent for Orange Book Value (OBV), a pricing solution for used vehicles.
- Financial Stability: The company has a solid financial profile and growing operating leverage.
Risks:
- Customer Experience: If Droom fails to provide a seamless vehicle search experience, it could negatively impact the buyer-seller interaction on the platform.
- Technology Maintenance: The company must continuously maintain and improve its technology infrastructure to avoid service quality issues.
- Cybersecurity Risks: A potential cyber attack could compromise user data, damaging Droom’s reputation.
- Dependence on Auto Dealers: A decrease in the number of auto dealers could impact business operations and reduce marketplace liquidity.
Conclusion: Is Droom IPO a Good Investment?
Droom’s IPO is an exciting opportunity for investors interested in India’s rapidly growing e-commerce and automobile sectors. With a solid track record in vehicle listings, a technology-driven platform, and a significant market share, Droom is well-positioned for future growth. However, investors should consider the company’s profitability concerns and cybersecurity risks before investing. If the company can overcome these challenges, Droom has the potential to deliver substantial returns as it continues to scale its operations both domestically and internationally.
