A well-known Mumbai-based automobile multi-channel company that is best known for its various types of car dealings under different segments, CarTrade will be going public with its IPO on 9th August. The subscription for their initial public offering will be open till 11th August.
CarTrade was founded by Vinay Sanghi and Rajan Mehra in 2009 to offer a one-stop platform for all people to come and seek guidance, help, or advice related to cars. In simple terms, this involves buying and selling both new and used cars that can be done in one place itself.
They operate this channel with many other car brands that deal under the aegis of CartTrade such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz.
The dynamic duo behind this concept of the start-up was already bagged by the immense experience in their corporate career. While Sanghi has been in the position of CEO for Mahindra First Choice, Rajan Mehra has been in the role of Country Head of e Bay.
Their work profiles have shaped their approach to automobile marketing and hence did not find any problem of expanding their wide-ranging expertise of management in the automobile sector.
With this, CarTrade has been successful to create an ecosystem that enables people to approach a single platform to respond to all their car needs or requirements in a simple, efficient, and time-bound manner.
They have become so experienced in the functioning of vehicular dealerships that allied fields of work are also conducted by CarTrade like dealing with OEMs – original equipment manufacturers, connecting with the dealers, working out with bank insurance, or communicating with the banks, or simply managing other stakeholders in the process.
More Details On CarTrade’s IPO
With respect to IPO, they have already received approval from SEBI to raise 2,000 crores through public offerings. They have filed for DRHP in the month of May to put up ‘OFS – Offer For Sale’ for 1,23,54,811 equity shares of the company. Post the listing, the company would be parting 26.9% of the company’s share to its investors.
An interesting fact about CarTrade that makes it a better proposition to invest in is that it is the only profitable automobile marketplace that is operating online in the country.
The company has seen an upward trend since FY18 losses and has ever since been making profits only. This proved with their business report where despite the low revenue turnover in 2021 with Rs 281.53 crore as compared to the revenue turnover of Rs 318.44 crores in 2020, they have managed to gather more share of profit. Their profit for the current year of 2021 stands at Rs 101.07 crores as against the profit of Rs 21.29 crores in 2020.
Before also, the start-up has gathered impressive funding through investment which is $307 to date. In terms of share, Warburg Pincus has the largest share of the pie, holding 43.44% share, followed by Temasek’s shareholding of 26.48%.
Other stakeholders in the share of the company comprise JP Morgan with 11.93% shareholding, March Capital with 9.79% shareholding, and Sanghi and his family with a 3.56% stake in CarTrade.
With all this said, CarTrade alone is not playing the game. It is certainly competing against other strong players such as Cars25, Cardekho, Mahindra First Choice, Droom, Spinny who have also leveraged the market opportunities in the automobile sector.
Droom is also preparing to launch its IPO soon. It has already entered the unicorn club and is eyeing a leap in profits from $54 million last year to $65 million this year.
The Way Ahead
Meanwhile, soon CarTrade will disclose the details of the price band and the size of the IPO soon in the coming week after consulting with its group of merchant bankers who would guide them best with their financial advice.
CarTrade has been going strong especially after acquiring its own competitor in 2015 and bagging the dominating share of 51% in Shriram Automall in 2018. We wish them luck and hope to see them growing in the coming years.