CarTrade Tech IPO to open on August 9; price band fixed at Rs 1,585-1,618

The initial public offering (IPO) will start a subscription on August 9 and close on August 11. The bidding for anchor investors began on August 6.

At the upper end of the price band, the IPO is supposed to mobilize Rs 2,998.51 crore.                                  

CarTrade is a software company that has built interconnections between stakeholders like manufacturers, dealers, and banks.

The company referred to an industry report to highlight a constant move towards online auto portals, and the total addressable market in India was assessed at USD 14.3 billion in FY 2020.

Sanghi stated that given the number of engagements and transactions on the platform, CarTrade is one of the country’s most prominent automotive data destinations. 

The company foresees that listing the equity shares will improve its visibility and brand image and present liquidity to its shareholders while also presenting a public market for the equity shares in India, as per CarTrade’s Red Herring Prospectus.

Established in 2009, CarTrade is financed by marquee investors — JP Morgan, Warburg Pincus, Temasek, and March Capital. The CarTrade platform enables customers to purchase and sell repossessed cars as well as new cars. The company said it is a professionally managed entity and does not have an identifiable promoter (SEBI rules).

As a part of the OFS, CMDB II will offload 22.64 lakh equity shares, Highdell Investment Ltd will sell 84.09 lakh equity shares.  Macritchie Investments Pte Ltd will give 50.76 lakh equity shares, and Springfield Venture International will divest 17.65 lakh equity shares.

The company will not immediately get any proceeds from the offer. Instead, the selling shareholders will get all the proceeds in proportion to the offered shares sold by the respective selling shareholders as part of the offer.

Currently, CMDB II owns an 11.93 percent stake in CarTrade43, Highdell Investment owns a 34.44 percent stake, MacRitchie Investment has a 26.48 percent shareholding, and Springfield Venture International holds a 7.09 percent stake in the company.

Half of the OFS issue size has been kept for qualified institutional buyers (QIBs), 35 percent for retail investors, and the outstanding 15 percent for non-institutional investors. Citigroup Global Markets India, Axis Capital, Kotak Mahindra Capital Company, and Nomura Financial Advisory and Securities (India) Private Limited are the investment bankers to the issue.

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