CarTrade Tech IPO: All You Need To Know
The IPO will open on Aug. 9 and close on Aug. 11.
Warburg Pincus and Temasek-backed CarTrade Tech will launch its three-day initial public offering on Monday as private equities and existing shareholders look to pare stake in the marketplace for used vehicles.
The company will sell shares at Rs 1,585-1,618 apiece in its IPO starting Aug. 9. It’s seeking a market valuation of Rs 7,416 crore at the upper end of the price band. The IPO, according to its red herring prospectus, is an offer-for-sale of 1.85 crore shares.
Who’s Selling...
Highdell Investment Ltd. (Warburg Pincus): 84.1 lakh shares.
Macritchie Investments Pte (Temasek): 50.8 lakh shares.
CMBD-II: 22.6 lakh shares.
Springfields Venture International: 17.7 lakh shares.
Vinay Vinod Sanghi (Jointly held with Seen Vinay Sanghi): 4.5 lakh shares.
Shree Krishna Trust: 2.6 lakh shares.
Bina Vinod Sangh (jointly held with Vinay Vinod Sanghi) : 1.8 lakh shares.
Daniel Edward Neary: 70,000 shares.
Victor Anthony Perry-III: 50,546 shares.
The issue constitutes 40.43% of the post-offer equity capital. Axis Capital Markets, Citigroup Global Markets, Kotak Mahindra Capital and Nomura Advisory are book-running lead managers for the IPO.
Before the IPO, the company had raised funds via private placement in form of preference shares at Rs 825.13 apiece in October, and in form of equity shares at Rs 1,376.80 apiece in April.
Issue Details
Issue Duration: Aug. 9-11.
Issue Size: Up to Rs 2,988 crore.
Face Value: Rs 10 per share.
Lot Size: 15 shares and multiples.
Listing: BSE and NSE.
Watch the full interaction with the company here:
Objective
The issue is sale of secondary shares to public, and the funds raised will go to the selling shareholders and not the company.
Business
The company is a multi-channel auto platform that operates under several brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.
Through these platforms, it allows new and used automobile customers, dealerships, original equipment manufacturers and other businesses to buy and sell vehicles online. The company also aims to create an automotive digital ecosystem to connect customers, OEMs, dealers, banks, insurance companies and other stakeholders.
CarTrade Tech offers marketing, buying, selling and financing of new and pre-owned cars, two-wheelers as well as pre-owned commercial vehicles and farm and construction equipment.
The company earns 57% of its revenue from commission and fees from auctions and remarketing services. Its other revenue sources include online advertising solutions, lead generation, inspection and valuation services.
Financials
CarTrade Tech’s revenue from operations fell in the fiscal ended March 2021. Its profit attributed to owners, however, surged during the period, led by deferred tax write-back worth Rs 63 crore. The company has been profitable since fiscal 2019 and has zero debt.
Peers
There are no listed companies in India that engage in a business similar to that of CarTrade Tech. Among unlisted competitors are brands such as Cars24 Services Pvt. Ltd., CarDekho and BikeDekho (Girnar Software Private Ltd.), Droom Technology Pvt. Ltd. and Mahindra First Choice Wheels Ltd.
Risks
The Covid-19 pandemic may affect its business, results of operations, cashflow and financial condition in the future.
The company may be adversely impacted by a fall in individual car ownership or sudden decline in demand for certain types of vehicles.
It may experience disruptions, failures or breaches of its technology platforms.
An actual or a perceived failure to protect personal information and other data could damage its reputation and brands.