CarTrade Tech Limited IPO

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1) CarWale and BikeWale, ranked number one on relative online search popularity when compared to their key competitors over the period. It is a multi-channel auto platform with coverage and presence across vehicle types and value-added services. Their platforms operate under several brands: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto, and AutoBiz. Through these platforms, it enables new and used automobile customers, vehicle dealerships, vehicle OEMs, and other businesses to buy and sell their vehicles in a simple and efficient manner. They offer a variety of solutions across the automotive transaction value chain for marketing, buying, selling, and financing new and pre-owned cars, two-wheelers as well as pre-owned commercial vehicles, and farm and construction equipment.

2) It generates revenues from several business streams primarily comprising:
(i) commission and fees from the auction and remarketing services of used vehicles.
(ii) online advertising solutions on CarWale, CarTrade and BikeWale.
(iii) lead generation for OEMs, dealers, banks, and other financial institutions and insurance companies.
(iv) inspection and valuation services for banks and other financial institutions, insurance companies, and OEMs.

3) Competitive Strengths
(i) Leading Marketplace for Automotive Sales
(ii) Strong Brands and Superior Customer Experience
(iii) Proprietary End-to-end technology Platforms
(iv) Profitable and Scalable Business Model

Complete Analysis of CarTrade IPO

Objects of the CarTrade Tech Limited IPO:

Issue comprises 18,532,216 Eq shares, (i) to carry out the Offer for Sale aggregating up to ₹2,998.51 Cr; and (ii) achieve the benefits of listing the Equity Shares on the Stock Exchanges.
DRHP of CarTrade Tech Limited IPO
RHP of CarTrade Tech Limited IPO

CarTrade Tech Limited IPO Details:

Open Date: Aug 09 2021
Close Date: Aug 11 2021
Total Shares: 18,532,216
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built
Issue Size: 2998 Cr.
Lot Size: 9 Shares
Issue Price: ₹ 1585 - 1618 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 20 2021

Promoters And Management:

(i) Vinay Vinod Sanghi, is the Chairman, Managing Director, and the Chief Executive Officer of the Company. He holds a bachelor’s degree in commerce from the University of Bombay. He was appointed as the Chief Executive Officer of the Company on September 1, 2009. He has previously been associated with Mahindra First Choice Wheels Limited and Project Automobiles (Bombay) Private Limited. He has over 30 years of experience in the automobile industry. He received an aggregate compensation of `52.18million in Fiscal 2021. (ii) Aneesha Menon, is an executive director and Chief Financial Officer of the Company. She is a chartered accountant with the Institute of Chartered Accountants of India. She was previously employed with S. R. Batliboi & Co. LLP and has 13 years of experience in the field of finance. She joined Automotive Exchange Private Limited (an erstwhile Subsidiary that was subsequently amalgamated with our Company) as AVP -Finance on December 8, 2015. She was then appointed as the Chief financial Officer of our Company on July 21, 2020. She received an aggregate compensation of `5.39million in Fiscal 2021. (iii) Victor Anthony Perry III, is a Non-ExecutiveDirector of the Company. He holds a bachelor’s degree of science in civil engineering from the University of Virginia and a master’s degree in business administration from the Harvard University. He was previously the president and chief executive officer of TrueCar, Inc. (iv) Kishori Jayendra Udeshi is an independent director of the Company. She holds a master’s degree of arts in economics from the University of Bombay. She is an associate of the Indian Institute of Bankers. She was appointed as deputy governor of the Reserve Bank of India from June 10, 2003, to October 12, 2005.

Financials of CarTrade Tech Limited IPO:

 
Particulars (in Cr.) FY21 Mar-20 Mar-19 Mar-18
Sales 281 298 243 123
Purchase of Stock in Trade 3 16 1 0.00
Changes in Inventories -1 1 -1 0.00
Employee Benefit Expenses 130 133 127 80
Other expenses 78 108 86 63
Operating Profit 71 39 29 -21
OPM % 26% 13.28% 12.13% -16.59%
Other Income 32 20 23 25
Interest 4 3 3 0.5
Depreciation 20 17 15 7
Profit before tax 46 38 35 -3
Total Tax Exps 63 8 9 4
Net Profit 100 31 25 -7
NPM % 12.68% 10.49% 10.65% -5.57%
No. of shares 4.58 4.58 4.58 4.58
EPS in Rs 22 5.65 4.31 -2.35
 

Comparison With Peers:

There are no listed companies in India that engage in a business similar to that of this Company.

Recommendation on CarTrade Tech Limited IPO:

Review and Recommendation of  Car Trade IPO from InvestorZone is 5/10 1. CarTrade is a pure tech platform which is an asset light model. It sells new , used cars and bikes from its platform like CarWale and BikeWale. Apart from this, they have platform called Shriram Automall to sell pre-owned cars, 2W, 3W, Commercial vehicle and Farm equipments. 2. It is a debt free company and generating good cash flows from the business. 3. Unlike new age tech companies, it is a profitable business from the last 3 years. 4. It has a backing of marquee investors like Warburg Pincus which shows the kind of business Cartrade is doing. 5.  It has shown good Revenue, PAT and EPS growth in the last 3 years. 6. It has no listed peer to compare with. This will give advantage to the company in terms of valuation.

Lead Manager of CarTrade Tech Limited IPO:

  1. Axis Capital Limited
  2. Citigroup Global Markets India Private Limited
  3. Kotak Mahindra Capital Company Limited
  4. Nomura Financial Advisory And Securities (India) Private Limited

Registrar of CarTrade Tech Limited IPO:

  1. Link Intime India Private Limited

Company Address:

12th Floor, VishwaroopIT Park, Sector 30A, Vashi, Navi Mumbai 400 705, Maharashtra, India Tel: +91 22 6739 8888

Discussion on CarTrade Tech Limited IPO:

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