CarTrade Tech, a multi-channel auto marketplace, will raise around Rs 3,000 crore via an initial public offering (IPO). The offer will be open on August 9 and close on August 11.
The offer is priced at Rs 1585-1618 per equity share. With no fresh issue, the company’s IPO is a complete offer for sale of 12,354,811 equity shares by investors and other selling shareholders. The company will not receive any funds from this IPO.
Commenting on the reason for not going for fresh fund raise, Vinay Sanghi, CMD, CarTrade Tech Limited said, “We are a profitable company. Our cash and cash equivalents are pretty significant. We have enough for all the investments and acquisitions, we may plan in the future. Thus, we only went ahead with an offer for sale.”
The company offers a marketplace for vehicle dealerships, vehicle OEMs and other businesses to new and used automobile customers, through its several vertically integrated brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and Auto Biz.
At present, the affiliates of Warburg Pincus, Temasek, JP Morgan and March Capital are the investors in the company. The company has seen good interest among investors.
CarTrade Tech’s consumer platforms namely CarWale, CareTrade and BikeWale, collectively saw an average of 32 million unique visitors per month.
CarTrade Tech launched CarTrade and CarTrade Exchange in 2009. Subsequently, it acquired Automotive Exchange Private Limited (CarWale) in 2016, and grew its revenue from Rs 34.72 crore in the financial year 2016 to Rs 88.01 crore in the financial year 2020.
The company’s total income stands at Rs 2,81.52 crore, Rs 318.44 crore and Rs 266.80 crore in financial years 2021, 2020 and 2019, respectively.
Like many businesses, the company also witnessed the impact of COVID-19. It adversely affected their revenue from operations for the first half of the financial year 2021 (during the lockdown). “We have felt the short-term impact of COVID and lockdown. However, post lockdown, it bounced back,” stated Sanghi.
He added the effect of COVID on digitalisation has been very extreme, which is not limited to the automobile sector. Sanghi said, “There was a huge change in behaviour of customers and businesses. We feel there is a new wave of digitalisation on the rise not just in India but around the world.” Another change is the rise in personal ownership. “People want to ride their own vehicle rather than share.” Sanghi stated, “This could provide a tremendous opportunity to company's like us.”
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