Forthcoming

CarTrade Tech Limited IPO

Initial Public Offer

Established in 2009, CarTrade is India’s leading online marketplace where individuals can transact in new and used vehicles. The platform also acts as an information source for consumers. One can get access to news and information regarding automobiles along with expert car reviews that assist buyers in choosing the right vehicles. Since the commencement of operations, the company has managed to expand its offerings. Currently, its network comprises more than 4,000 dealers all over India. Apply IPO

About CarTrade IPO Objectives

– Prepaying/repaying the entire or a significant portion of the company’s outstanding borrowings
– Fulfilling general corporate purposes

CarTrade IPO – Details

CarTrade has filed preliminary papers with SEBI for an initial public offering (IPO) of 18,532,216 equity shares. As per the Mumbai-based company’s Draft Red Herring Prospectus (DRHP), its public issue will comprise an offer for sale (OFS) by promoters. That said, there will not be any fresh issue. CarTrade plans to raise roughly Rs. 2998 crores via its initial public offering.

CarTrade IPO Important Dates

IPO Open Date 09 August 2021
IPO Close Date 11 August 2021
Basis Of Allotment Date 17 August 2021
Initiation Of Refunds 18 August 2021
Credit Of Shares To
Demat ACcount
20 August 2021
IPO Listing Date 23 August 2021

Opening Date : 09 August 2021

Closing Date : 11 August 2021

Price Band : Rs 1585 – Rs 1618

Issue Size : Rs 2998.51 Cr

Face Value : Rs 10

Market Lot : 9 shares

 

Why Should You Invest in CarTrade IPO?

CarTrade has an asset-less business model which enables it to use balance funds to finance acquisitions that boost top-line growth. Moreover, it is constantly taking measures to enhance its technology and reduce its costs by improving operational efficiency.

From a financial standpoint, things look quite favourable as well. The company has recorded a 45% increase (approx.) in its capital gearing ratio between FY2018 and FY2020. Moreover, this company’s revenue from operations for FY20 stood at Rs. 298.3 crore against Rs. 243.3 crore in the previous fiscal year, thus representing a 22.61% increase.

Considering the long term outlook in relation to India’s automotive market, investing in CartTrade IPO could be lucrative for investors. Thus, they might want to consider this company’s public issue once it is open for subscription.

Financial highlights

For The Period Ended Total Revenue Total Assets Profit After Tax
31 December 2020 Rs. 189.61 Crores Rs. 1882.02 Crores Rs. 85.05 Crores
31 March 2020 Rs. 318.45 Crores Rs. 1470.41 Crores Rs. 31.29 Crores
31 March 2019 Rs. 266.81 Crores Rs. 1427.09 Crores Rs. 25.92 Crores

 

CarTrade – Noteworthy Highlights

Here are some noteworthy highlights of CarTrade :

– This company has regional operations in India. It has a network of over 5,100 distributors spread across 90 cities in the country.

– Currently, more than 2,36,000 used vehicles are registered on CarTrade’s online platform.

– As of now, CarTrade has raised $307.4 million worth of funds over 8 rounds. Its last funding was on 12 April 2021.

– The principal shareholders of this company include Highdell Investments and MacRitchie Investments. Together, they hold Almost 70% shares of CarTrade.

– In 2015, CarTrade completed the acquisition of CarWale for $90 million in an all-cash deal. This takeover turned out to be a massive boost for CarTrade’s top line.

Strengths

  •  Asset-Light Business Model: CarTrade works on an asset-light business model. It enables the company to reduce its capital expenditure and utilise the balance amount to fund more takeovers, for example, Adroit Inspection and CarWale.
  • Presence in Two-Wheeler Segment: This company has managed to scale its operations in the two-wheeler division through its BikeWale platform. BikeWale and CarWale are way ahead of their peers in relation to search popularity.
  • Technological Enhancements: CarTrade invests a significant amount of funds in upgrading its technology. This has enabled the company to improve its scale of operations while reducing fixed expenses at the same time. Resultantly, CarTrade’s margins have increased along with its revenue.

 

Weaknesses

  •  Low Marketing Budget: CarTrade has a low marketing budget in comparison to its peers and primarily relies on organic growth. However, it needs to increase its marketing budget to survive in the highly competitive space.
  • Debt Burden: This company has a substantial amount of outstanding borrowings, which it aims to pay off by utilising funds it raises via the upcoming IPO.

 

Oppertunities

  •  Rise in Demand: The increase in demand for cars among the middle class and young individuals could prove to be a massive boost for CarTrade.
  • Growing Automobile Market: The high inflow of foreign direct investments and favourable government policies, such as FAME and Production-Linked Incentive, could lead to the expansion of the automotive sector of India. This could subsequently turn out to be quite favourable for CarTrade.

Threats

  • Drop in Car Ownership: CarTrade needs to be cautious of a drop in the number of car owners or demand for a particular type of vehicle. For example, the popularity of older vehicles may diminish over the long term owing to the advent of electronic vehicles and connected cars.
  • Increased Usage of Public Transportation: Shared mobility could increase significantly coming out of the pandemic as more and more individuals move back to major cities. The financial crisis induced by the pandemic could stop them from purchasing cars in the future.
  • Fraudulent Actions: The fraudulent behaviour of individuals engaging on CarTrade’s online platform poses a threat to the company’s success.
  • Growing Competition: CarTrade faces tough competition from its peers, which include Cars24, Mahindra First, Droom, and more. The company has to ensure that its customer-acquisition strategy is top-notch to succeed in the highly competitive space

Competitor Analysis: Market Peers

The following table is a representation of the competition that CarTrade faces from its peers:

Company CarTrade Droom Technology CarDekho
About CarTrade Is An Online Marketplace That Provides A Platform For Individuals To Buy And Sell New And Old Cars. Moreover, It Provides Extensive Information And Reviews Regarding Automobiles. Droom Provides An Online Platform That Allows Individuals To Purchase And Sell New And Pre-Owned Two-Wheelers And Four-Wheelers. This Company Is A Car Search Venture. It Helps Individuals To Purchase Cars That Are Suitable For Them.
Company Type Private Private Private
Funding $307.4 Million $133 Million $247.5 Million

 

 

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