CarTrade Tech IPO Review 2021: Another week full of IPOs. CarTrade Tech Ltd has opted to raise Rs. 2,998.51 cr through IPO. The IPO will open from August 9th to August 11th. In this article, we’ll cover the CarTrade tech IPO Review and look into important information on the CarTrade Tech Ltd IPO and find out the possible prospects of the company.
Table of Contents
CarTrade Tech IPO Review – About the Company
Founded in 2010, CarTrade Tech Ltd. is a tech company that offers an online marketplace for automotive sales and allied products such as financing and insurance. CarTrade offers an online platform that connects prospective buyers with used car owners in the buying and selling of vehicles. The company operates through its brands namely CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. They also operate through a wide range of dealers, vehicle OEMs among others.
The company’s revenues are derived through 3 main segments. The first being Shriram Automall. Here the company earns a commission on selling used cars on its platform. This platform is one of the top competitors when it comes to used vehicle auctions based on the number of vehicles listed for auction in FY20.
The next important source of revenue for the company is online advertising and lead generation solutions on its branded online platforms. This is done through its brands CarWale, BikeWale, Cartrade etc. Here, dealers, OEMs and consumers connect to research and review vehicles, list their vehicles for sales. The third important source is the valuation and inspection service provided to banks and other financial institutions, insurance companies and OEMs.
When it comes to financials the company is profitable and has a strong balance sheet with net cash of around ₹650 crores as of March 31, 2021. The company saw revenue growth at a CAGR of 1.3% in between FY2019-21. The profits of the company saw an increase of 133.8% during the same period. According to the prospectus, the used car, 2 wheeler and commercial vehicles market in India is expected to grow at a CAGR of 11%, 8% and 7% respectively
Its competitors include.
- Cars24
- CarDheko
- Mahindra First Choice
- Quickr
- Olx
- Droom
CarTrade Tech IPO Review – Grey Market Premium
The shares of CarTrade Tech traded at around a 28% premium in the grey market before the IPO. The shares traded at a price of Rs.2068 giving them a premium of Rs. 450 over their issue price band of Rs 1585-1618 per share.
CarTrade Tech IPO Review – Key IPO Information
CarTrade Tech is a professionally managed company with no promoters. The IPO is essentially an Offer for Sale as it doesn’t include any fresh issue. Axis Capital Ltd, Citigroup Global Markets India Pvt Ltd, Kotak Mahindra Capital Company Ltd and Nomura Financial Advisory And Securities (India) Pvt Ltd. have been appointed as the lead managers to the issue. Link Intime India Pvt Ltd has been appointed as the registrar to the issue.
| Particulars | Details |
|---|---|
| IPO Size | ₹2,998.51 Cr |
| Fresh Issue | --- |
| Offer For Sale(OFS) | ₹2,998.51 Cr |
| Opening Date | Aug 9, 2021 |
| Closing Date | Aug 11, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹1585 to ₹1618 per equity share |
| Lot Size | 9 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Aug 23, 2021 |
Purpose of the CarTrade Tech IPO
The proceeds from the IPO will be used for:
- Offer for Sale
- To achieve the benefits of listing on stock exchanges.
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In Closing
In this post, we covered the CarTrade Tech IPO Review. The IPO opens on 9th August and closes on 11th August 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of CarTrade Tech.
Do let us know what you think of the CarTrade Tech IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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