CarTrade IPO: CarTrade files DRHP for Rs 2,000 crore IPO

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NEW DELHI: Online auto classifieds platform CarTrade has filed a draft red herring prospectus (DRHP) for an initial public offering (IPO) with capital market regulator Sebi to raise around Rs 2,000 crore. The offer comprises 26.96 per cent of post-offer paid-up equity share capital. The face value of equity shares is Rs 10 apiece.

In a recent fundraising round, CarTrade Tech, which helps users find used as well as new cars, rose to a near unicorn status with a valuation close to $1 billion. Some of its early backers cashed out in a recent funding round where it raised $25 million from Malabar India Fund and IIFL.

The Warburg Pincus- and Temasek-backed company has appointed Axis Capital, Citigroup Global Markets India, Nomura Financial Advisory and Securities (India) and Kotak Mahindra Bank to manage the issue. Link Intime India has been appointed as the registrar.

The issue consists of a pure offer-for-sale (OFS) of 12,354,811 equity shares. The firm is raising no fund for itself. Investors participating in the OFS include CMDB II (1,608,324 equity shares), Highdell Investment (3,568,217 shares), Macritchie Investments (3,568,217 shares), Springfield Venture International (1,124,700 shares) and Bina Vinod Sanghi (183,333 shares).

The move comes on the back of consumers preferring personal mobility and a sharp surge in used car sales during the Covid-19 pandemic, which has provided a fillip to the firm’s business.

The platform helps in auctioning cars, tractors, trucks and farm equipment for dealers from banks, non-banks and insurance companies, and in lead generation for new cars.

According to the DRHP, CarTrade recently changed its status from a private company to a public one. The company acquired CarWale in 2015 and took a majority stake in Shriram Automall in 2018.

The company has reserved 75 per cent of the stake for qualified institutional buyers (QIB). Not more than 15 per cent of the offer will be available for non-institutional investors and not more than 10 per cent for retail bidders, according to the DRHP.

Founded in 2009 by Vinay Sanghi, former CEO of Mahindra First Choice, and Rajan Mehra, former country head of eBay India, CarTrade has received funding from Canaan Partners, Epiphany Overseas Ventures, Tiger Global, Temasek, March Capital, Warburg Pincus and investor Austin Ligon.

CarTrade is set to join the long list of new-age technology focused startups, including Zomato, Nykaa, PolicyBazaar and Flipkart, which are eyeing the primary market for listings.

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