CarTrade Tech IPO: Online auto classifieds platform Cartrade Tech’s IPO is subscribed 41 percent on the first day. Under this IPO of Rs 2,998.51 crore, 1 crore 29 lakh 72 thousand 552 shares are to be issued, out of which applications for 53 lakh 406 shares have been received on Monday. Subscription in this IPO is open till Wednesday 11th August. Under this public issue, all 1.85 crore shares are to be issued by the existing shareholders under Offer for Sale (OFS).
According to the data available on the exchange, retail individual investors (RIIs) have subscribed 80 per cent of the shares reserved for them, while non-institutional investors have subscribed only 3 per cent and qualified institutional buyers (QIBs) have subscribed only 1 per cent. . Under this IPO of the company, 1 crore 85 lakh 32 thousand 216 equity shares are to be issued at a price of Rs 1,585 to 1,618 per share. CarTrade had said on Friday that it has already raised Rs 900 crore from anchor investors.
Premium reduced in gray market
Talking about the premium going on in the gray market, it has seen a decline in the past. Till last week, there was a premium of Rs 700 in the shares of Car Trade Tech in the gray market, which has come down to Rs 310. According to the people who deal in the shares of unlisted companies, the share price of the company was trading at Rs 1928 in the gray market on Monday, which shows a premium of about 19 percent.
CarTrade Tech was founded in 2009 by investors like Warburg Pincus, Temasek, JP Morgan and March Capital. Customers can buy and sell new and used cars on CarTrade’s platform. The company’s multi-channel auto platforms include CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto and AutoBiz. Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital Company and Nomura Financial Advisory & Securities are the managers of this IPO.
Should I subscribe to CarTrade Tech IPO?
Should I subscribe in Cartrade Tech’s IPO or not? Let us know what many analysts and brokerages have to say about this:
Anand Rathi; Rating : Subscribe
The financial performance of the company during the financial year 2019-20 has been affected by the COVID-19 pandemic. Based on the upper price of the share placed in the company’s IPO, its P/E is around 199.26 and the market capitalization works out to Rs 7,415.95 crore. From this it seems that the share price of the company has been kept very high in the IPO. But for the future prospects and being the first to enter the market, Anand Rathi has given it a subscribed rating. Also, investors have been advised to invest in it keeping in mind the medium to long term.
Antique Stock Broking; Rating : Subscribe
According to Antique Stock Broking, like most other internet based businesses, the valuations of this company are also looking high. The increasing trend among customers to rent rather than buy their own car, major changes in technology or government regulations, risk of fraud by second-hand vehicle buyers and failure to protect people’s data are fears of the company. There are risk factors. But the company’s platform as a brand is very strong and its business model is likely to grow with the passage of time. Also, the company turned profitable in the financial year 2018-19 and during the financial year 2019-20 also it was the only profit making company in the field of auto digital platform. On this basis, Antique Stock Broking has advised to subscribe to it.
Nirmal Bang; Rating : Subscribe
Cartrade Tech is the only profit making company in the country in the vehicle platform space. CarWale and BikeWale are the number one platforms in their respective categories. This gives hope for continued growth of the company in future also. The balance sheet of the company is also good. Keeping these things in mind, analysts of Nirmal Bang are considering Cartrade Tech as a good investment opportunity.
Axis Capital; no rating
According to Axis Capital, there is a lot of competition in the automotive industry in India. Cartrade Tech competes with competitors like Cars24, CarDekho, BikeDekho, Droom and Mahindra First Choice Wheels. However, Cartrade Tech has a very modern and sophisticated technology platform. The company’s data-based digital platform has a huge database of vehicles in India. During the 3 months ending 30 June 2021, the company’s websites and apps have handled about 17.6 lakh user sessions every day.
Story Input: Surbhi Jain, PTI
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