{"id":3751,"date":"2021-08-05T19:04:12","date_gmt":"2021-08-05T13:34:12","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=3751"},"modified":"2021-08-06T18:34:32","modified_gmt":"2021-08-06T13:04:32","slug":"cartrade-ipo","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/","title":{"rendered":"CarTrade IPO: The Only Profitable Used Car Seller and Car Aggregator Is Going Public. Should You Subscribe?"},"content":{"rendered":"\n<p>Being the only profitable online and offline used car seller and car aggregator going public, CarTrade has commanded a lot of attention in the market. Reasonable valuation, a diverse range of services, and increasing demand for used cars highlight the CarTrade Tech <a href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-ipos\/?utm_source=blog&amp;utm_medium=article\">IPO<\/a>. However, the company has reported certain risks and challenges that might affect their business in the days and years to come.<\/p>\n\n\n\n<p>Read on to know the vital details you need to assess the CarTrade <a href=\"https:\/\/www.tickertape.in\/blog\/ipo-investment\/\">IPO<\/a> as an investment opportunity.&nbsp;<br><\/p>\n\n\n\n<p><strong>This article covers:<\/strong><\/p>\n\n\n\n<ul><li><a href=\"#about\">About CarTrade Tech Ltd <\/a><\/li><li><a href=\"#aggregator\">More than just an auto aggregator <\/a><\/li><li><a href=\"#brands\">Brands of CarTrade Tech <\/a><\/li><li><a href=\"#revenue\">Streams of revenue <\/a><\/li><li><a href=\"#promoters\">Promoters of the company <\/a><\/li><li><a href=\"#IPO\">CarTrade Tech IPO details<\/a> <\/li><li><a href=\"#objects\">Objects of the issue<\/a> <\/li><li><a href=\"#investors\">Exiting investors<\/a> <\/li><li><a href=\"#financials\">Financials of CarTrade<\/a> <\/li><li><a href=\"#acquisitions\">Notable acquisitions<\/a> <\/li><li><a href=\"#strengths\">Strengths of the company<\/a> <\/li><li><a href=\"#risks\">Risks of CarTrade Tech<\/a><\/li><\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#About-CarTrade-Tech-Ltd\" title=\"About CarTrade Tech Ltd\">About CarTrade Tech Ltd<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#More-than-just-an-auto-aggregator\" title=\"More than just an auto aggregator\">More than just an auto aggregator<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Brands-of-CarTrade-Tech\" title=\"Brands of CarTrade Tech\">Brands of CarTrade Tech<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Streams-of-revenue\" title=\"Streams of revenue&nbsp;\">Streams of revenue&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Promoters-of-the-company\" title=\"Promoters of the company\">Promoters of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#CarTrade-Tech-IPO-details\" title=\"CarTrade Tech IPO details\">CarTrade Tech IPO details<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Registrar-and-lead-managers-to-the-IPO\" title=\"Registrar and lead managers to the IPO\">Registrar and lead managers to the IPO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Category-wise-reservation-of-the-IPO\" title=\"Category-wise reservation of the IPO\">Category-wise reservation of the IPO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Objects-of-the-issue\" title=\"Objects of the issue\">Objects of the issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Exiting-investors\" title=\"Exiting investors\">Exiting investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Utilisation-of-the-proceeds\" title=\"Utilisation of the proceeds\">Utilisation of the proceeds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Financials-of-CarTrade\" title=\"Financials of CarTrade\">Financials of CarTrade<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Notable-acquisitions\" title=\"Notable acquisitions&nbsp;\">Notable acquisitions&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Strengths-of-the-company\" title=\"Strengths of the company\">Strengths of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/blog\/cartrade-ipo\/#Risks-of-CarTrade-Tech\" title=\"Risks of CarTrade Tech\">Risks of CarTrade Tech<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"about\"><span class=\"ez-toc-section\" id=\"About-CarTrade-Tech-Ltd\"><\/span><strong>About CarTrade Tech Ltd<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Incorporated in 2000, Mumbai-based CarTrade Tech Ltd is a leading multi-channel online and offline auto aggregator platform. The company was founded by Vinay Sanghi, ex-CEO of Mahindra First Choice, and Rajan Mehra, ex-country head of eBay India. Marquee investors such as the US private <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> giant Warburg Pincus, March Capital Partners, JP Morgan, and Singapore\u2019s state investor Temasek back the company.<\/p>\n\n\n\n<p>CarTrade offers an online and offline automobile platform for vehicle dealers, new and used automobile customers, original equipment manufacturers (OEM), and other businesses to facilitate buying and selling various types of vehicles. The company deals in various automobile types such as new and used cars, 2-wheelers, and commercial vehicles.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"aggregator\"><span class=\"ez-toc-section\" id=\"More-than-just-an-auto-aggregator\"><\/span><strong>More than just an auto aggregator<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CarTrade is also involved in offering and facilitating related solutions like marketing and financing automobiles. They also double as a software company that interconnects various stakeholders such as vehicle dealers, manufacturers, and banks, and NBFCs. CarTrade boasts a robust network of over 180 owned or franchisee stores, 40+ OEMs, and more than 15,000 dealers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"brands\"><span class=\"ez-toc-section\" id=\"Brands-of-CarTrade-Tech\"><\/span><strong>Brands of CarTrade Tech<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The group operates several well-known brands such as CarWale, BikeWale, CarTradeExchange, AutoBiz, Adroit Auto, and Shriram Automall.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"revenue\"><span class=\"ez-toc-section\" id=\"Streams-of-revenue\"><\/span><strong>Streams of revenue<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CarTrade earns revenues via commission and fees collected from auctions and remarketing services, lead generation, online advertising solutions, dealers; technology-based services offered to OEM, financial institutions, and inspection and valuation services.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"promoters\"><span class=\"ez-toc-section\" id=\"Promoters-of-the-company\"><\/span><strong>Promoters of the company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CarTrade Tech Ltd is a professionally managed company and has no identifiable promoters based on <a href=\"https:\/\/www.tickertape.in\/blog\/securities-and-exchange-board-of-india-functions-powers-and-regulations-of-sebi\/\">SEBI<\/a> rules.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"IPO\"><span class=\"ez-toc-section\" id=\"CarTrade-Tech-IPO-details\"><\/span><strong>CarTrade Tech IPO details<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are a few details of the ~Rs 2,998.51 cr-CardTrade IPO:<\/p>\n\n\n\n<ul><li>The IPO is set to open on 9<sup>th<\/sup> Aug and close on 11<sup>th<\/sup> Aug<\/li><\/ul>\n\n\n\n<ul><li>The entire issue is an <a href=\"https:\/\/www.tickertape.in\/blog\/offer-for-sale\/\">offer for sale<\/a><\/li><\/ul>\n\n\n\n<ul><li>While the face value of each equity share is Rs 10, the price band is set at Rs 1,585 to Rs 1,618 apiece<\/li><\/ul>\n\n\n\n<ul><li>The market lot consists of 9 shares; the minimum lot available for bidding is 1 and the maximum is 13<\/li><\/ul>\n\n\n\n<ul><li>The company is looking to get listed on BSE and <a href=\"https:\/\/www.tickertape.in\/blog\/national-stock-exchange\/\">NSE<\/a> and may list on 23<sup>rd<\/sup> Aug 2021<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registrar-and-lead-managers-to-the-IPO\"><\/span><strong>Registrar and lead managers to the IPO<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>While Link Intime India Private Ltd is the registrar to the IPO, Axis Capital Limited, Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited, and Nomura Financial Advisory And Securities (India) Pvt Ltd are the lead managers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Category-wise-reservation-of-the-IPO\"><\/span><strong>Category-wise reservation of the IPO<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>75% for qualified institutional buyers<\/li><li>15% for non-institutional investors<\/li><li>10% for retail investors<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"objects\"><span class=\"ez-toc-section\" id=\"Objects-of-the-issue\"><\/span><strong>Objects of the issue<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Via the <a href=\"https:\/\/www.tickertape.in\/blog\/ipo-process\/?utm_source=blog&amp;utm_medium=article\">IPO,<\/a> CarTrade wants to allow existing investors an exit route and achieve the benefits of listing on stock exchanges.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"investors\"><span class=\"ez-toc-section\" id=\"Exiting-investors\"><\/span><strong>Exiting investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>CMDB II<\/li><li>Bina Vinod Sanghi<\/li><li>Shree Krishna Trust<\/li><li>Highdell Investment<\/li><li>Vinay Vinod Sanghi<\/li><li>Daniel Edward Neary<\/li><li>MacRitchie Investment<\/li><li>Victor Anthony Perry III<\/li><li>Springfield Venture International<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Utilisation-of-the-proceeds\"><\/span><strong>Utilisation of the proceeds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CarTrade Tech will not receive any IPO proceeds as the issue is entirely an offer for sale.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"financials\"><span class=\"ez-toc-section\" id=\"Financials-of-CarTrade\"><\/span><strong>Financials of CarTrade<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul id=\"block-a435aaf9-359f-4033-aee7-c267dc22676e\"><li>In FY 2021, CarTrade earned a revenue of Rs 281.52 cr compared to Rs 318.44 cr a year ago and a net profit of Rs 101.07 cr compared to Rs 31.29 cr in FY 2020<\/li><li>They have ample cash and cash equivalents to fund future investments and acquisitions<\/li><li>The company has been focusing on being asset-light<\/li><li>The PE ratio based on diluted EPS for FY 2021 at the upper end of the price band is 84.31<\/li><li>For the last three fiscals, CarTrade\u2019s weighted average return on <a href=\"https:\/\/www.tickertape.in\/blog\/net-worth\/\">net worth<\/a> has been 3.52%<\/li><\/ul>\n\n\n\n<p>Following is the table of restated financials of CarTrade Tech for three years:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"468\" src=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Cra-trade-Ipo-table-1024x468.png\" alt=\"\" class=\"wp-image-3762\" srcset=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Cra-trade-Ipo-table-1024x468.png 1024w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Cra-trade-Ipo-table-300x137.png 300w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Cra-trade-Ipo-table-768x351.png 768w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Cra-trade-Ipo-table.png 1089w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"acquisitions\"><span class=\"ez-toc-section\" id=\"Notable-acquisitions\"><\/span><strong>Notable acquisitions<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In Jan 2018, the company had acquired a 51% stake in Shriram Automall for ~Rs 157 cr. And in 2015, they had bought rival CarWale to consolidate the online auto classifieds industry.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"strengths\"><span class=\"ez-toc-section\" id=\"Strengths-of-the-company\"><\/span><strong>Strengths of the company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>CarTrade Tech is the only profitable online used car seller and car aggregator compared to peers like CarDekho, Cars24, Droom, and Mahindra First Choice<\/li><li>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.&nbsp; This suggests that CarTrade has an opportunity to scale<\/li><li>Many car buyers are shifting to used cars to cut down their costs, which can be a boon to the company<\/li><li>The company\u2019s CarWale and BikeWale platforms ranked #1 on relative online search popularity compared to peers. Further, the number of transactions and engagements on CarTrade\u2019s platform is among the largest automotive data destinations in India<\/li><li>For Jun 2021 quarter, the company\u2019s BikeWale, CarWale, and CarTrade collectively had an average of 27.11 mn unique visitors per month. Of these 88.14% were organic visitors, which means the company didn\u2019t have to spend anything to get them<\/li><\/ul>\n\n\n<span class='bctt-click-to-tweet'><span class='bctt-ctt-text'><a href='https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fcartrade-ipo%2F&#038;text=CarTrade%20is%20the%20only%20profitable%20online%20used%20car%20seller%20and%20car%20aggregator%20and%20the%20number%20of%20transactions%20and%20engagements%20on%20it%E2%80%99s%20platform%20is%20among%20the%20largest%20automotive%20data%20destinations%20in%20India&#038;via=TickertapeIN&#038;related=TickertapeIN' target='_blank'rel=\"noopener noreferrer\">CarTrade is the only profitable online used car seller and car aggregator and the number of transactions and engagements on it\u2019s platform is among the largest automotive data destinations in India <\/a><\/span><a href='https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fcartrade-ipo%2F&#038;text=CarTrade%20is%20the%20only%20profitable%20online%20used%20car%20seller%20and%20car%20aggregator%20and%20the%20number%20of%20transactions%20and%20engagements%20on%20it%E2%80%99s%20platform%20is%20among%20the%20largest%20automotive%20data%20destinations%20in%20India&#038;via=TickertapeIN&#038;related=TickertapeIN' target='_blank' class='bctt-ctt-btn'rel=\"noopener noreferrer\">Click To Tweet<\/a><\/span>\n\n\n<h2 class=\"wp-block-heading\" id=\"risks\"><span class=\"ez-toc-section\" id=\"Risks-of-CarTrade-Tech\"><\/span><strong>Risks of CarTrade Tech<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The slowdown caused in the mobility and auto sector due to the COVID-19 has had an impact on CarTrade. But that\u2019s not it. The changing market landscape of ownership, rentals, and ride-sharing services within these industries also pose a challenge to the company<\/li><li>The increasing push for <a href=\"https:\/\/www.tickertape.in\/blog\/will-india-welcome-electric-vehicles\/\">electric vehicles<\/a> and connected vehicles could hurt the used car segment of the business<\/li><li> As per the company, demand for the cars sold through their platforms moves in line with the demand for cars in general. So a decline in the latter can adversely impact CarTrade<\/li><li> Demand for certain used cars may witness unwarranted decline due to the introduction of new cars built with innovative technologies<\/li><li> Listing cars with new technologies on the platform would take several years before they are available in the market<\/li><\/ul>\n\n\n\n<ul><li> The company has cited challenges regarding anti-pollution standards that require replacing commercial regularly<\/li><li><\/li><li>COVID-19 may affect the company\u2019s ability to execute growth strategies, expand their business, operations, cash flows, and financial situation<\/li><\/ul>\n\n\n\n<p>Do your own homework before subscribing to the CarTrade Tech IPO. If you find it a worthy investment option, ensure that you read up about subscribing to an IPO so you have a seamless experience.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CarTrade, a leading multi-channel auto aggregator platforms is looking to go public. Here&#8217;s a brief analysis of the CarTrade IPO<\/p>\n","protected":false},"author":27,"featured_media":3757,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[9,1727],"tags":[481,208],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Car-trdae-IPO-1.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/3751"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=3751"}],"version-history":[{"count":10,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions"}],"predecessor-version":[{"id":3809,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions\/3809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/3757"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=3751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=3751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=3751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}