IPO

Car Trade Tech Limited- Dates, Price & Overview4 min read

August 9, 2021 3 min read
Car Trade

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Car Trade Tech Limited- Dates, Price & Overview4 min read

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Car Trade Tech is all set to make its debut in the market with its Rs.2,999 crore initial public offering (IPO) on August 9. The issue will entirely be an offer for sale of up to 1,85,32,216 shares by a few existing shareholders.

The IPO will open for subscription on 9th August, Monday and will close on 11th August, Wednesday. The issue may list on Aug 23, 2021. The price for each share will range between Rs.1,585-Rs.1,618 and the face value of each equity share for this IPO is Rs.10.

Link Intime India Pvt Ltd is the registrar for this particular IPO.

Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital Company and Nomura Financial Advisory and Securities (India) Private Limited are the investment bankers to the issue. 

Know the company

The company’s business vertices, CarWale and BikeWale have marked their presence in the digital world and have ranked number one on relative online search popularity when compared to their key competitors over the period from April 2020 to March 2021.

While, Shriram Automall is one of the leading used vehicle auction platforms based on number of vehicles listed for auction for the financial year 2020. Among their key competitors, it is the only profitable automotive digital platform for the financial year 2020. 

The company is a multi-channel auto platform with coverage and presence across vehicle types and value-added services. Their platforms operate under several brands: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. Through these platforms, it enables new and used automobile customers, vehicle dealerships, vehicle OEMs and other businesses to buy and sell their vehicles in a simple and efficient manner.

Car Trade generates revenues from several business streams primarily comprising commission and fees from auction and remarketing services of used vehicles for retail customers, banks and other financial institutions, insurance companies, OEMs, leasing companies, and fleet and individual operators, in the amount of Rs.142.49 Cr for the financial year 2021. Also, through online advertising solutions on CarWale, CarTrade and BikeWale for OEMs, dealers, banks and other financial institutions. The revenue is also made through lead generation for OEMs, dealers, banks and other financial institutions and insurance companies.

Here’s the IPO timeline

IPO timeline
Objective of the Offer

By going public, the company proposes to utilise the Net Proceeds of the fresh offer towards the following.

–    To carry out the offer for sale.  

–    To achieve the benefits of listing the Equity Shares on the Stock Exchanges. 

The Company however will not receive any proceeds from the offer and all such proceeds will go to the selling shareholders.

Further, the company is hoping that that listing of the equity shares will enhance its visibility and brand image and provide liquidity to its shareholders and will also provide a public market for the equity shares in India.

Company’s financial data

Car Trade

Strengths

  1. CarTrade Tech is the only profitable online used car seller and car aggregator compared to peers like CarDekho, Cars24, Droom, and Mahindra First Choice
  2. While the total addressable market is pegged at $ 14.4 bn, the combined revenue of all players was a mere Rs 4,693 cr in FY 2020.  This suggests that CarTrade has an opportunity to scale
  3. Many car buyers are shifting to used cars to cut down their costs, which can be a boon to the company.

Risks

  1. The company may be adversely affected by a general decline in individual car ownership or sudden declines in demand for certain types of vehicles.
  2. Futuristically, the company may experience disruptions, failures or breaches of the technology platforms.
  3. Its actual or perceived failure to protect personal information and other data could damage its reputation and brands.
  4. The company going ahead may be adversely affected by fraudulent behaviour of sellers or purchasers of used vehicles listed on our platforms.
  5. It may not be able to acquire, utilize and maintain our domains and trademarks.
  6. The COVID-19 pandemic, or a similar public health crisis could impact the company.

Sources – RHP, BLRM 

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