The Securities and Exchange Board of India (SEBI) approved CarTrade Tech’s Initial Public Offering (IPO) on Monday, which is projected to raise approximately Rs. 2,000 crore.
In May of this year, the company submitted its draft red herring prospectus (DRHP), a compulsory procedure for any company to go public, with SEBI declaring an offer for sale (OFS) for 1,23,54,811 equity shares of the company. The offering represents 26.9% of the company’s post-offer paid-up equity share issue.
Under the banner CarTrade Tech, the company is going to the stock exchange. CarTrade Tech is indeed a massively parallel and vertically integrated brand that enables new and used automobile customers, vehicle dealerships, vehicle OEMs, and other businesses through its several scalable and deeply integrated brands including CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto, and Auto Biz.
The Indian online auto classifieds platform, CarTrade reported total revenue of approximately Rs 318 crore in their DRHP filings, with a net profit of Rs 31.2 crore. The company’s revenue for FY 21 was Rs 189.6 crore, with a net profit of Rs 85 crore. Since the beginning of 2019, CarTrade has really been profitable. CarTrade’s EBITDA margins have also increased. In its filings, the firm also stated that it was the country’s sole profitable vehicle marketplace. CarTrade goes head to head with companies such as Cars24, Cardekho, Mahindra First Choice, Droom, as well as spinny, among others.
After becoming profitable, CarTrade maintains an asset-light business strategy, managing around 40 OEMs, more than 15,000 dealers as well as 114 auto malls, the majority of which are leased or rented from third parties. Due to its diverse revenue base’s operations, sales and marketing, and technology efficiency, its operating expenses grew more slowly than revenues. The company aims to continue investing in technologies such as artificial intelligence and machine learning in order to give more precise and timely information to its consumers and improve customer experience.
The offering will be managed by Axis Capital, Citigroup Global Markets India, Nomura Financial Advisory and Securities (India), and Kotak Mahindra Bank. CarTrade was founded in 2009 by Vinay Sanghi, the former CEO of Mahindra First Choice, as well as Rajan Mehra, the former country head of eBay India, with backing from Canaan Partners, Epiphany Overseas Ventures, Tiger Global, Temasek, March Capital, Warburg Pincus, and Austin Ligon.
Apart from CarTrade, SEBI has also approved five more companies to float their IPO which include Aptus Value Housing Finance, Supriya Lifescience, Krsnaa Diagnostics, Vijaya Diagnostic Centre, and Ami Organics.