09 Aug , 2021 By : Kanchan Joshi
The buzz in the initial public offering (IPO) market continues with four companies launching their initial share sales this week to raise over Rs14,628 crore collectively. Online auto classified platform CarTrade Tech will launch its initial share sale today. The CarTrade platform allows customers to buy and sell used cars as well as new cars.
The issue concludes on August 11 and the price band has been fixed at Rs1,585-1,618 a share. At the upper end of the price band, the IPO is expected to mobilise Rs2,998 crore. As per market observers, CarTrade shares are available at a premium of Rs380 in the grey market.
The IPO comprises a pure offer for sale (OFS) of 18.53 million shares by existing shareholders and promoters. The company on Friday said it has raised Rs900 crore from anchor investors ahead of its issue.
''CTT (CarTrade Tech) offers a unique play on rising digitisation of new and pre-owned vehicle transaction value chain/ecosystem. Given the prevailing preference for digital platforms including the recent listings, we assign SUBSCRIBE rating to the issue for listing gains. Long term wealth generation at CTT will be a function of scalability, relevance and journey towards healthier return ratios,'' ICICI Direct said in a note.
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.
''In terms of valuations, the post-issue FY2021 PE works out 73.4x to (at the upper end of the issue price band). There are no listed peers for comparison. However, the company is doing better compared to unlisted peers in terms of financial. We believe the company has a strong brand, better technology platforms, a profitable & scalable business model. Hence , we recommend a subscribe rating on the issue,'' Amarjeet Maurya - AVP - Mid Caps, Angel Broking said.
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.
The company's consumer platforms i.e. CarWale, CarTrade and BikeWale, collectively get 3.2 crore average unique visitors every month (during the three-month period ending March 31, 2021), and Shriram Automall and other auction platforms had 8,14,316 vehicles listed for auction during FY21.
0 Comment