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  • CarTrade’s Issue subscribed 99% on Day 2, Strong demand for Retail portion booked 153%

    Published on August 11, 2021

    CarTrade Tech, a multi-channel auto platform via its several integrated brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and Auto Biz, received bids of 1,28,90,934 shares against the offered 1,29,72,552 equity shares, as per the 5:00 pm data available on the bourses.

    The portion reserved for retail investors was subscribed 1.53 times. While the Qualified Institutional Buyer category was subscribed 0.59 times and the Non-Institutional Investor category was subscribed 0.27 times.

    The Offer will be an offer for sale of up to 18,532,216 Equity Shares (“Offer for Sale”) by the Selling Shareholders.

    Key brokerage houses like Antique Stock Broking, Anand Rathi, Ashika Stock Broking Limited, Nirmal Bang and ICICI Direct, have given recommendations of “Subscribe” to the issue for long term perspective while highlighting the key strengths of the company like (a) differentiated and profitable business model (b) Strong brand suite serving an addressable market worth US$ 14.3 billion (c) Strong competitive positioning driven by superior customer experience, brand and powerful network effect and (d) looking to monetize value added services and untapped opportunities. CarTrade Tech is a multi-channel auto platform with a presence across varied vehicle types and value-added services. Its platforms operate under several brands: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. Through these platforms, CT enables new and used automobile customers, vehicle dealerships, vehicle OEMs and other businesses to buy and sell their vehicles. Furthermore, it is the only profitable company among other related Platforms with 32 million average monthly unique visitors.

    As per RedSeer analysis, new car sales in India are expected to grow at 10% CAGR to ~44 lakh units in FY26E amid present low penetration levels while used car sales are expected to grow at 11% CAGR to 83 lakh units in FY26E owing to shortening of replacement cycles. As of FY20, Indian OEMs spent ~14% of their total advertising budget of ~US$1.2 billion on digital advertising, in contrast to global average of ~42%. Similarly, digital ad spend of Indian dealers was limited to US$10 million i.e. ~6-8% of advertising budget vs. ~25-90% in mature markets. Going forward, growth in India’s digital advertising market as well as post Covid thrust on digital marketing is expected to benefit the sector.

    Axis Capital Limited, Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited and Nomura Financial Advisory and Securities (India) Private Limited are the appointed lead manager to the Offer.