IPO analysis: CarTrade Tech Limited
IPO rating: Invest for listing gains
About the issue:
CarTrade Tech Ltd is a multi-channel auto platform provider company. The company is coming out with its initial public offering (IPO) of equity shares with a face value of Rs 10 per equity share. The issue size of the company is Rs 2,998.51 crore, with the entire amount being the sale of shares by existing investors, according to its red herring prospectus. The price band of the issue has been fixed at Rs 1,585 to Rs 1,618 per equity share. The IPO opening date is August 09, 2021, while it will close on August 11, 2021. It will be listed on the Exchanges on August 23, 2021. The IPO market lot size is 9 shares. A retail-individual investor can apply up to a maximum of 13 lots (117 shares or Rs 1,89,306). The company aims to utilise the net proceed towards carrying out an offer for sale as well as to achieve the benefits of listing the equity shares on the stock exchanges.
CarTrade Tech Limited IPO
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IPO opening date
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August 9, 2021
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IPO closing date
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August 11, 2021
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Issue type
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Book built issue IPO
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Face value
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Rs 10 per equity share
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IPO price
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Rs 1,585 to Rs 1,618 per equity share
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Market lot
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9 shares
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Min. order quantity
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9 shares
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Listing at
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BSE & NSE
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Issue size
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1,85,32,216 equity shares of Rs 10
(aggregating up to Rs 2,998.51 crore)
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Offer for sale
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1,85,32,216 equity shares of Rs 10
(aggregating up to Rs 2,998.51 crore)
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About the company:
Incorporated in the year 2000, CarTrade is a multi-channel auto platform with coverage and presence across vehicle types & value-added services. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new & used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy as well as sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities. Its platforms, CarWale and BikeWale, are ranked number one on relative online search popularity when compared to their key competitors over the period from April 2020 to March 2021. Meanwhile, Shriram Automall is a leading used-vehicle auction platform based on the number of vehicles listed for auction for the financial year 2020.
Competitive strengths:
A leading platform for automotive sales with a synergistic ecosystem.
Operate various brands i.e. CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, AutoBiz, etc.
A comprehensive range of services i.e. automotive buying, selling, financing, marketing, etc.
Profitable and scalable business model.
Company financials:
The company reported a loss of Rs 6.8 crore in the FY18. From there on, the company has turned into profits and reported its highest-ever profit in FY21, amounting to Rs 101.07 crore. The revenue was affected due to the reduced purchasing power, owing to the pandemic.
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Particulars
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For the year/period ended (in crore)
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31-Mar-21
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31-Mar-20
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31-Mar-19
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31-Mar-18
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Total assets
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1,930.19
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1,470.41
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1,427.09
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1,357.08
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Total revenue
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281.5
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318.45
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2 66.81
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149.53
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Profit after tax
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101.07
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31.29
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25.92
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(6.88)
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Recommendation:
The primary business of the company is using its platforms to enable new & used automobile customers, vehicle dealerships, vehicle original equipment manufacturers (OEMs), and other businesses to buy as well as sell their vehicles. CarTrade is among India‘s most popular automotive websites with a goal to make car shopping enjoyable. It provides a range of trustable inputs and facilities to assist car buyers in choosing the perfect car, at the best price, from the ideal vendor. CarTrade.com is an automobile platform that allows customers to purchase and sell new & old vehicles. Business-to-business (B2B) and business-to-consumer (B2C) activities are supported by this portal. It has a dealer network that assists it in handling its businesses. This distributor site for B2B transactions helps distributors to track their digital transactions and sales. In addition to its online marketplace, it has regional operations in India, with a chain of over 5,200 distributors spread across 90 cities. Over 2,36,000 registered used vehicles are presently listed on the platform. Owing to the above reasons, we recommend investing in the company’s IPO for a listing gain.
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