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CARTRADE TECH IPO

  • Writer: The Shareholder
    The Shareholder
  • Aug 7, 2021
  • 2 min read


IPO Details:

Price Band: 1585-1618

Cutoff Price: 1618


About Company:


CarTrade is India’s number one online auto portal for both cars and two-wheelers, based on relative online search popularity in FY 2021, and is one of the leading used vehicle auction platform based on number of vehicles listed for auction for FY 2020. Among the key competitors, CarTrade was the only profitable digital auto platform for FY 2020. They are a multi-channel auto platform with coverage and presence across vehicle types and value-added services through our brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. CarTrade revenue primarily comprises commission and related income which includes commission and fees from remarketing services and inspection and valuation services of used vehicles as well as website services and fees which includes revenues generated from online advertising solutions, lead generation, technology based services and sale of used cars.


Competitive Strengths:

  1. Leading Marketplace for Automotive Sales with a Synergistic Ecosystem.

  2. Brands and Customer Experience Driving Powerful Network Effects.

  3. Proprietary End-to-End Technology Platforms.

  4. Focus on Data Science to Provide Superior Solutions.

  5. Profitable and Scalable Business Model.

  6. Founder-led Management Team.


Strategies:

  1. Well Positioned to Benefit from Growth of the Automotive Sector and Digitalization.

  2. Grow our Business through Digital Ecosystem, Online-Offline Presence and Vehicle-Agnostic Approach.

  3. Create an Opportunity to Monetize Value Added Services and Untapped Opportunities Through Strong Customer Base and Technology Platform.

  4. Invest Further in Technology.

  5. Supplement Organic Growth with Selective Acquisitions.


Financial Performance:



Net Profit and EPS are increasing year on year. Revenue didn't grow much. With EPS of 22.1, the company's P/E is 73.2.


Objects of the Issue:


The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Offer for Sale


Grey Market Premium:


Our view: GMP of the IPO is decent and also the price is fairly valued after comparing it with listed competitors. We can expect this IPO to list at premium and hence I would be applying for this IPO for listing gains.


Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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