CarTrade shares make a weak debut, list below issue price

Shares of CarTrade made a weak stock market debut on Friday by listing at ₹1,599.8 per share on the NSE, a discount to its issue price of ₹1,618 apiece. On BSE, CarTrade shares were trading around ₹1,579, down more than 2% from its IPO issue price. The scrip hit a low of ₹1,476 in early deals.

The initial public offer (IPO) of the online auto classified platform was subscribed 20.29 times on the closing day of the subscription. The three-day issue that closed on August 11, received bids for 26,31,74,823 shares against 1,29,72,552 shares on offer, as per exchanges data. The category for qualified institutional buyers (QIBs) received 35.45 times subscription, while the portion for non-institutional investors was subscribed 41 times. The retail individual investors (RIIs) quota was subscribed 2.75 times.

Santosh Meena , Head of Research, Swastika Investmart said that CardTrade debuted secondary market on weak note amid risk-off sentiment in equity markets. “There were some concerns like 100% FPO and low entry barrier business therefore we recommended investors to subscribe to it only for listing gain as new edge tech companies are in demand but the listing is disappointing where we advise only aggressive investors to hold this stock in their portfolio otherwise many other good opportunities are available in the market,” Meena said.

The CarTrade platform allows customers to buy and sell used cars as well as new cars. The IPO comprised a pure offer for sale (OFS) of 18.53 million shares by existing shareholders and promoters. The company had raised ₹900 crore from anchor investors ahead of its issue.

Rahul Sharma, Co- Founder, Equity99 said, "CarTrade Tech Ltd is a multi-channel auto platform provider company. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities." 

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. Founded in 2009, CarTrade is backed by marquee investors -- Warburg Pincus, Temasek, JPMorgan, and March Capital.

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, CarTradeExchange, Adroit Auto, and AutoBiz.