CarTrade Tech IPO: Today, August 11, investors have the last chance to subscribe to the IPO of online auto classifieds platform CarTrade Tech. This IPO opened on 9th August and it was 41 percent subscribed on the first day itself. Under this IPO of Rs 2,998.51 crore, all 1.85 crore shares will be issued by the existing shareholders under the Offer for Sale (OFS) ie the company is not going to issue new shares through this IPO. Before the opening of the IPO, the company had raised Rs 900 crore from anchor investors.
On the other hand, talking about the gray market premium, before the IPO, there was a premium of Rs 700 in the shares of Car Trade Tech in the gray market, which fell to Rs 310. According to people who deal in the shares of unlisted companies, when its IPO was opened on Monday, the company’s share price in the gray market was at a premium of about 19 percent i.e. Rs 1928. Cartrade Tech is a multi-channel auto platform. The company has several brands such as CarWale, Cartrade, Shriram Automal, BikeWale, Cartrade Exchange, Adroit Auto and Autobiz. New and used vehicles are sold on its platform.
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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 company 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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