CarTrade was founded in 2009 to offer a platform for potential buyers and sellers to buy and sell cars. CarTrade offers a platform to evaluate, discuss, seek advice and also value used cars, which is what has made it a lot more popular. Vinay Sanghi who founded CarTrade Tech is a veteran of the secondary car market, having been the CEO of Mahindra First Choice. The used car market is estimated at $27 billion in India and it is growing at nearly 15% annually. In short, the market is likely to double in 4 years and 9 months.
Key things to know about the CarTrade Tech IPO
Here is what you need to know about the CarTrade Tech IPO.
- CarTrade operates 2 sub-portals. While CarTrade.com caters to the retail consumers for buying and selling used and new cars, B2B CarTradeExchange.com helps dealers source leads and fulfil client requirements digitally.
- It has equity participation from established PE funds like Warburg Pincus, Temasek, JP Morgan and March Capital.
- Its subsidiary platforms CarWale.com and BikeWale.com rank on top in relative search popularity in this particular space. They have about 3 crore visitors between them.
- CarTrade covers a complete gamut including information, comparison, execution and fulfilment. It also offers on-road price and dealer certified cars.
A glance at the CarTrade Tech Financials
CarTrade is one of the few profitable digital plays in India, as they like to claim. The numbers clearly show that the company has been building traction.
Investment view on CarTrade
The entire issue is an offer for sale or OFS to give exit to shareholders. No fresh funds will flow into the company. Here are some of the key shareholders who will be selling in the OFS. The key selling shareholders in the OFS include CMDB, Highdell, MacRitchie and Springfield. These names will account for a chunk of the holdings with the promoter group selling shares in a small way.
In terms of valuation, normally there is no benchmark since most digital competing plays are loss making and hence taking any valuation call is tough. However, one can look at the stock as a good play on the emerging digital market place. Also considering that the used car industry in India is worth $27 billion and growing at 15%, it offers a huge opportunity for CarTrade to survive and thrive even in the midst of competition from the predominantly unorganized sector.
The article is for informative purpose and does not suggest to buy or sell or hold. Decision or investing is to be taken by individuals.
Evaluate investing in the IPO based on your individual risk tolerance, investment Span etc.