CarTrade Tech, a multi-channel auto marketplace enabling new and used automobile customers, vehicle dealerships, vehicle OEMs and other businesses via its several scalable and vertically integrated brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and Auto Biz has received market regulator Securities and Exchange Board of India's (SEBI) nod for the Initial Public Offering (IPO) route. The company had filed its DRHP with SEBI on May 15, 2021.
The issue is a complete offer for sale of 12,354,811 equity shares by Investor and Other Selling Shareholders. There will be no funds received by the company via this Initial Public Offering.
Between April 2020 and March 2021, the company in comparison to its peer set had it's platforms such as CarWale and BikeWale have a dominant online search popularity while Shriram Automall stood as a leading used vehicle auction platform based on no of vehicles listed for auction in FY20.
In the recent years the company has seen considerable expansion in its business, its total income increased at a CAGR of 45.94% between FY18 and FY20. Besides being the most profitable amongst it's peers, the company saw it's online and offline listings across platforms see a steady increase from 7.09 L in FY19 to 8.14L in FY21.
Profitable since FY2019, the company operates on an asset light business model, operating only 114 automalls which are in majority leased or rented from third parties. Its operating expenses grew at a lower rate than it's revenues due to its operating, sales and marketing and technology leverage over the broad revenue base. CTL plans to continue investing into technology such as AI and machine learning in order to provide more relevant and timely information to its customers and enhance user experience.
CarTrade Tech's consumer platforms i.e CarWale, CareTrade and BikeWale, collectively saw an avg of 29.96 million unique visitors per month during the 3 month period of Dec 30,2020 and the websites and apps have handled approx. 2.05 mn user sessions per day. Its platform's offer a variety of data driven solutions across automotive transaction value chain for marketing, buying, selling and financing of new and pre owned cars, two wheelers as well as pre owned commercial vehicles and farm and construction equipment.
CTL generates revenues from commission and fees from auctions and remarketing services, online advertising solutions, lead generation, technology based services to OEMs/Dealers/Banks and other financial institutions and inspection and valuation services. Its marquee institutional shareholders include affiliates of Warburg Pincus, Temasek, JP Morgan and March Capital.
India's internet adoption increased significantly from 317 million internet users in 2015 to approximately 690 million users in 2020. Amidst evolving customer needs and strong digital trends such as increasing internet penetration, smartphone adoption and growth of e-commerce, the Indian automotive industry is ripe for digital disruption.
Investment Bankers appointed to the issue are Axis Capital Limited, Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited and Nomura Financial Advisory and Securities (India) Private Limited.