CarTrade open to more acquisitions in auto, autotech

New Delhi: After completing the acquisition of OLX India’s classifieds and auto business, auto portal CarTrade Tech Ltd is looking at acquisitions in the automotive and autotech space to consolidate its share, according to Vinay Sanghi, the founder-chairman of CarTrade.

“My gut says it will be automotive and automotive tech, which is what we are good at. And that’s where we will keep looking. It might also be automotive clean energy, but non-automotive acquisitions is way too premature,” Sanghi said in an interview.

Before the OLX acquisition, CarTrade had cash reserves of ₹1,100 crore and no debt. The acquisition of OLX’s classifieds and auto business was done for ₹535.54 crore. OLX also operates as a debt-free entity, holding around ₹100 crore in cash reserves.

This financial stability positions both companies favourably for their market expansion plan. OLX had invested in conservative mutual funds as well as overnight funds, yielding around 6% interest.

Through the collaboration with OLX, CarTrade aims to establish India’s largest auto classifieds and auto transactions platform. The combined entity of the CarTrade Tech group and OLX India is expected to attract 68 million unique average monthly visitors and facilitate 32 million annual listings, Sanghi added.

The annual number of vehicles auctioned across India is projected to reach 1.3 million, led by prominent players such as Cars24, CarDekho, Droom and Spinny.

Elaborating on the structure and working of the firm after the acquisition, Sanghi told Mint, “So, you know OLX is really known for used products—people selling used products—and auto is a massive category, or the largest category is auto. OLX is the biggest in used (cars), while CarWale, a subsidiary automotive platform, is the biggest in new (cars). In a way with this, we’ve got the best of new and used. In a way, that itself is a huge synergy between our businesses, bringing the new and the used together.”

The company in a statement added that a total of 4,000-plus employees will now be employed by it and will have a physical presence in more than 100 cities in cities. “We plan to keep OLX independent. We have an Indian CEO (Amit Kumar) who will continue to run the company. There are about 1,600 employees in the company who will continue to be part of that company and our style of acquisitions is that we back people even though we own 100% of the company,” Sanghi added.

The company has been following it since their first two acquisitions of CarWale and Shriram Automall, with their respective CEOs (Chief Executive officers) still taking the firms forward.