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BENGALURU : Girnar Software Pvt. Ltd, which runs CarDekho, an online portal for new and used cars, is looking to list on the domestic exchanges over the next 18 months, a senior company executive said.

The plans for the initial public offering (IPO) are currently being discussed by the company’s board, said Amit Jain, co-founder and chief executive at CarDekho.

“We will now begin the processes and compliance from a regulatory perspective for the IPO. Markets are always favourable to a good company. At present, our business lines of selling new cars, insurance and financial services are profitable businesses or are breaking even," Jain said in an interview on Wednesday.

CarDekho’s rival, CarTrade Tech Ltd, an online marketplace for new and used cars, listed on the local exchanges in August.

Meanwhile, CarDekho raised $250 million earlier this week as a part of its pre-IPO round in a mix of equity and debt, led by LeapFrog, valuing the startup at $1.2 billion, making it the latest entrant to India’s unicorn club. A unicorn is a privately-held startup valued at over $1 billion.

Mint reported about CarDekho’s latest fundraise on Tuesday.

The company plans to use the fresh capital to scale its presence across smaller towns and cities to tap the growing demand for used cars.

It sells used cars across six cities in India after procuring them from more than 100 cities.

Jain said the company is currently making investments only in the used car business, which is a relatively new vertical for CarDekho.

He expects the used car business to turn profitable in two years.

CarDekho currently has a catalogue of more than 3,000 pre-owned cars on the platform.

With the fundraise, the company is actively looking to increase its presence to 12 cities by March.

“Tier-2 and 3 are key markets and a lot of growth is coming from these markets, especially for the used-car space. In the next 2-3 years, we will see almost 50% of our sales coming from tier-2 and 3 cities," Jain said.

Currently, CarDekho operates across key segments of buying and selling used cars, retailing new cars and financial services, which includes providing financing and insurance to car buyers.

It is also present in Southeast Asian countries such as Malaysia, Philippines and Indonesia. Southeast Asia currently contributes only 5% of its revenues currently, with the rest coming from the Indian market.

Vehicle insurance and car financing currently contribute about half of the revenues, with used cars and new cars contributing 20% and 25%, respectively, to the overall mix.

Girnar Software reported revenues of 240 crore in the financial year ended 31 March 2020. This marked a 50% jump over FY19 revenues of 159.8 crore, according to the latest available company documents procured from market research platform Tofler.

It also narrowed its losses 7% to about 82 crore during the same period.

The company is now in talks to procure a non-banking financial company (NBFC) licence and lend from its own books.

With the NBFC licence, the company plans to launch instant loans for customers purchasing used cars on its platforms.

Currently, the company works with partners to provide credit financing to car buyers and has already facilitated close to 150,000 loans on the platform.

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