CarTrade Tech shares list at loss, give up Rs 1,600 level at debut, trade at discount to IPO price

CarTrade Tech shares made a weak debut on BSE and NSE on Friday, 20 August 2021. CarTrade Tech shares got listed at Rs 1,599, down 1.12 per cent from the IPO of Rs 1,618 apiece. The initial public offering of CarTrade Tech was subscribed a little over 20 times. On the listing, the market capitalisation of the company stood at Rs 7,333.45 crore. CarTrade Tech is backed by marquee investors — Warburg Pincus, Temasek, JP Morgan, and March Capital. CarTrade Tech’s key competitors include brands such as Cars24 (Cars24 Services Pvt Ltd), CarDekho and BikeDekho (Girnar Software Pvt Ltd), Droom (Droom Technology Pvt Ltd), and Mahindra First Choice Wheels Ltd.

The three-day IPO received bids for 26.31 crore shares against 1.29 crore shares on offer. The category reserved for qualified institutional buyers (QIBs) received 35.45 times subscription, while non-institutional investors 41 times. The retail individual investors (RIIs) quota was subscribed 2.75 times.

CarTrade Tech 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, CarTradeExchange, Adroit Auto and AutoBiz. Analysts at Anand Rathi Financial Services had given subscribe rating to the IPO, considering the future prospect of the company and said that it is also placed at a sweet spot as the first mover advantage.

In the past 3 years, Revenue and EBITDA for Car Trade haven’t grown meaningfully. PAT jumped this year which was only optical as there was a tax credit, said an analyst. “When we talk about peers, Cars24 took 5 years to reach the same revenue as CarTrade Tech who took 11 years which shows the hyper scale-up threat. It also faces competition from ride-hailing services, car leasing services, other online resellers, unorganized resellers, and even car manufacturers who started their own subscription services,” Aditya Kondawar, Founder, COO, JST Investments, told The Outlooker Online.