CarTrade shares make a weak debut, list below issue price

CarTrade shares make a weak debut, list below issue price

Shares of CarTrade made a weak stock market debut on Friday by listing at ₹1,599.8 per share on the NSE, a discount to its issue price of ₹1,618 apiece. On BSE, CarTrade shares were trading around ₹1,579, down more than 2% from its IPO issue price. The scrip hit a low of ₹1,476 in early deals.

The initial public offer (IPO) of the online auto classified platform was subscribed 20.29 times on the closing day of the subscription. The three-day issue that closed on August 11, received bids for 26,31,74,823 shares against 1,29,72,552 shares on offer, as per exchanges data. The category for qualified institutional buyers (QIBs) received 35.45 times subscription, while the portion for non-institutional investors was subscribed 41 times. The retail individual investors (RIIs) quota was subscribed 2.75 times.

Santosh Meena , Head of Research, Swastika Investmart said that CardTrade debuted secondary market on weak note amid risk-off sentiment in equity markets. “There were some concerns like 100% FPO and low entry barrier business therefore we recommended investors to subscribe to it only for listing gain as new edge tech companies are in demand but the listing is disappointing where we advise only aggressive investors to hold this stock in their portfolio otherwise many other good opportunities are available in the market," Meena said.

The CarTrade platform allows customers to buy and sell used cars as well as new cars. The IPO comprised a pure offer for sale (OFS) of 18.53 million shares by existing shareholders and promoters. The company had raised ₹900 crore from anchor investors ahead of its issue.

Rahul Sharma, Co- Founder, Equity99 said, “CarTrade Tech Ltd is a multi-channel auto platform provider company. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities.”

The company generates revenues from commission and fees from auctions and re-marketing services, online advertising solutions, lead generation, technology-based services to OEMs, dealers, banks and other financial institutions, and inspection and valuation services. Founded in 2009, CarTrade is backed by marquee investors – Warburg Pincus, Temasek, JPMorgan, and March Capital.

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, CarTradeExchange, Adroit Auto, and AutoBiz.

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CarTrade Tech shares plunge 9% on debut, what should investors do?

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CarTrade Tech had a disappointing debut on the bourses, falling 8.8 percent in the morning on August 20 following nervousness in the market that was down nearly one percent. The stock opened at a 1.1 percent discount at Rs 1,600 on the BSE and hit a low of Rs 1,476 against the issue price of Rs 1,618.

“We recommend allotted investors to book profits on listing day and if non-allotted investors wish to buy on the listing day, it is better to wait and watch to accumulate at a better pricing range in the near future,” Prashanth Tapse, VP Research at Mehta Equities told Moneycontrol.

They were optimistic about the asset-light business model of the multi-channel auto platform which was profitable and highly scalable. “As an investor with risk may consider investing for long term,” he said.

CarTrade raised Rs 2,998.51 crore through its initial public offering which was an offer for sale by shareholders.

Astha Jain, Senior Research Analyst, Hem Securities, said investors should book partial profits and remaining for the long term. The company was the leading marketplace for automotive sales with a synergistic ecosystem and proprietary end-to-end technology platforms with focus on data science to provide solutions, she said.

It was the only profitable automotive digital platform among peers with an asset-light model and decent EBIDTA margins, she said.

CarTrade is a multi-channel auto platform with coverage and presence across vehicle types and value-added services, operating under several brands like CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.

Its several platforms enable new and used automobile customers, vehicle dealerships, vehicle OEMs and other businesses to buy and sell their vehicles.

The company operates on an asset-light business model, operating only 114 automalls, a large majority of which are leased or rented from third parties.

The company has invested in building technology platforms that can manage considerably increased offerings without requiring sizable additional investments, and its growing scale has resulted in a decrease of the share of fixed costs.

Its investments in technology have made the platforms scalable in a highly capital-efficient manner, and its asset-light business model has also allowed the company to use cash on its balance sheet for acquisitions which have formed important parts of its strategy, experts say.

“Looking at the business model and the future growth prospects, this IPO might turn out to be a good investment opportunity,” said Gaurav Garg, Head of Research at CapitalVia Global Research.

“Any investor who is upbeat about this space can hold for two-three years as this company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities and the business model appears to be robust,” he added.

The views and investment tips expressed by experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

CarTrade Tech makes a weak debut in stock markets, lists at over 1% below issue price

CarTrade Tech share price: The shares of online auto classified platform CarTrade Tech made a weak debut on the stock exchanges today listing at over 1 per cent lower than their issue price.

The scrip got listed at Rs 1,599.80 apiece on the National Stock Exchange (NSE), thereby registering a fall of 1.12 per cent from its offer price of Rs 1,618.00, while on the BSE, it opened at Rs 1,600.00, down 1.11 per cent from the issue price.

The stock slipped further from its opening rates and touched an intraday low of Rs 1,481.00 on NSE and Rs 1,481.55 on the BSE so far during the first half-hour of trade.

At 10:30 am, the scrip was trading at Rs 1,506.95 on the BSE, down 6.86 per cent from the issue price while on NSE it was at Rs 1,510.80.

Over 61.93 shares of CarTrade Tech were traded on the NSE during the first 30 minutes of trade, while over 2.29 lakh shares exchanged hands on the BSE, data from the respective stock exchanges showed.

The Rs 2,999 crore IPO of the online auto classified platform met a robust demand during its offer period from August 9-11. The issue was subscribed 20.29 times.

Through its platform, the company 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.