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Thursday, September 23, 2021

CarTrade Tech IPO opens today: Here’s everything you need to know

CarTrade Tech IPO: The Rs 2,999 crore initial public offering (IPO) of CarTrade Tech will be available from August 9-11, 2021. It has a price band of Rs 1,585-1,618 per share.

By: Express Web Desk | New Delhi |
Updated: August 9, 2021 1:20:09 pm
CarTrade IPO, CarTrade IPO price, CarTrade IPO GMPFounded in 2009, CarTrade is backed by marquee investors -- Warburg Pincus, Temasek, JP Morgan, and March Capital. The CarTrade platform allows customers to buy and sell used cars as well as new cars. (Representative image, express photo by Narendra Vaskar)

CarTrade Tech IPO: The initial public offering (IPO) of online auto classified platform CarTrade Tech, will open for subscription on Monday, August 9, 2021, at a price band of Rs 1,585-1,618 per share. The offer will be available till Wednesday, August 11, 2021.

The CarTrade platform allows customers to buy and sell used cars as well as new cars. The firm is a multi-channel auto platform with coverage and presence across vehicle types and value-added services through its brands – CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.

Through the offer, CarTrade Tech aims to raise Rs 2,998.51 crore with the help of an offer for sale (OFS) of 1,85,32,216 equity shares.

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.

Founded in 2009, CarTrade is backed by marquee investors — Warburg Pincus, Temasek, JPMorgan and March Capital. The company stated that it is a professionally managed entity and does not have an identifiable promoter (in terms of SEBI rules).

The company will not receive any proceeds from the OFS. It wants to accrue the benefits of listing equity shares on stock exchanges.

Investors who wish to subscribe to the CarTrade Tech IPO can bid in a lot of 9 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,562 to get a single lot of CarTrade Tech. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).

The applicants also must note that the cut-off time for UPI mandate confirmation is Thursday, August 12, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.

Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital Company and Nomura Financial Advisory and Securities (India) are the book running lead managers to the IPO while Link Intime India is the registrar of the issue.

Before heading into the IPO, CarTrade Tech raised nearly Rs 900 crore (Rs 8,99,55,36,352) from 43 anchor investors in lieu of 55,59,664 equity shares at Rs 1,618 each, data from the stock exchanges showed.

The anchor investors include the likes of Nomura, HSBC Global, Goldman Sachs, Jupiter India Fund, Elara India Opportunities Fund, Aditya Birla Sun Life Insurance Company, Bajaj Allianz Life Insurance Company, Bharti Axa Life Insurance Company, Axis Mutual Fund (MF), HDFC MF, Kotak MF and Sundaram MF among others.

The research team at Anand Rathi Share and Stock Brokers and ICICI Securities in their respective IPO notes have recommended a “Subscribe” to the offer.

Anand Rathi Research in its report said, “CarTrade Tech Ltd has a unique business model with no listed peers in the market. Covid-19 has impacted its FY21 financials. At the upper end of the IPO price band, it is offered at 4.4x P/BV and 29.6x EV/Sales and 73.4x P/E if we exclude accounting adjustments for deferred tax and attribute it on equity, then the asking price is at a P/E of around 199.26x to its FY21 earnings with a market cap of Rs 74,159.5 million which shows the issue is priced exorbitantly. However, considering the future prospect of the company and it is also placed at a sweet spot as the first mover advantage we assign “Subscribe” Rating to this IPO investors can invest in this company with medium to long term perspective.”

ICICI Direct Research in their report noted, “CTT (CarTrade Tech) offers a unique play on rising digitisation of new and pre-owned vehicle transaction value chain/ecosystem. Given the prevailing preference for digital platforms including the recent listings, we assign SUBSCRIBE rating to the issue for listing gains. Long term wealth generation at CTT will be a function of scalability, relevance and journey towards healthier return ratios.”

The share allotment is likely to take place on August 17, 2021, and the shares are expected to be listed on August 23, 2021, according to the timeline given in the red herring prospectus (RHP).

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