{"id":884,"date":"2021-08-07T06:25:24","date_gmt":"2021-08-07T06:25:24","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=884"},"modified":"2021-08-07T06:25:26","modified_gmt":"2021-08-07T06:25:26","slug":"car-trade-ipo-will-hit-the-primary-market-on-aug-09-should-you-subscribe","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/car-trade-ipo-will-hit-the-primary-market-on-aug-09-should-you-subscribe\/","title":{"rendered":"Car Trade IPO will hit the primary market on Aug 09. Should you subscribe?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>After a stellar subscription status of\nDevyani Int., Krsnaa Diagnostics, Exxaro Tiles and Windlas Biotech investors\nare gathering funds for the IPO of online automotive platform \u2018Car Trade\u2019. This\nis the 5<sup>th<\/sup> IPO in the month of August. The automotive e-commerce\nplatform operates several brands: CarWale, CarTrade, Shriram Automall,\nBikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. &nbsp;The issue size is a complete offer for sale.\nThe e-commerce platform is profitable and expected to fetch the sight of a lot\nof institutional investors.<\/p>\n\n\n\n<p><strong>Car Trade IPO Details<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Issuer Company: Car Trade<\/li><li>Industry: &nbsp;E-Commerce<\/li><li>IPO Size: 2,998.51 cr.<\/li><li>Price Band: 1585-1618<\/li><li>Issue Open Date: 09 Aug, 2021<\/li><li>Issue Close Date: 11 Aug, 2021<\/li><li>Listing Date: 23 Aug, 21<\/li><li>Minimum Lot Size: 9 shares<\/li><li>Face Value: 10 Rs. Per share<\/li><li>Employee Discount:&nbsp; <\/li><li>Retail Allocation: 35%<\/li><li>Listing Exchange: NSE, BSE<\/li><\/ul>\n\n\n\n<p><strong>Composition\nof Issue Size<\/strong><\/p>\n\n\n\n<p>The issue size of Rs. 2,998.51 cr. is\na complete offer for sale. The object of the Offer for Sale is to allow CMDB,\nHighdell Investments, Mac Ritchie Investments, Springfield Venture International\nand others to sell an aggregate of up to 18.5 million equity Shares held by\nthem amounting at Rs. 2,998.51 cr. The company will not receive any proceeds\nfrom the Offer for Sale. <\/p>\n\n\n\n<p><strong>About the\nCompany<\/strong><\/p>\n\n\n\n<p>The process of buying vehicles requires buyers to go through several channels and numerous stages. The multiplicity of transactions creates potential inefficiencies and negatively affects the margins of the seller that can be achieved on the sale of a vehicle physically. Therefore, an online automotive marketplace that can bring the buyers and sellers together and match the right vehicle buyers and vehicle sellers on a single platform possess a great opportunity.<\/p>\n\n\n\n<p>Must Read: <a href=\"https:\/\/www.invest19.com\/blog\/devyani-int-has-hit-the-market-its-time-to-deep-dive-into-its-financials\/\">Devyani Int. has hit the market! It\u2019s time to deep dive into its financials.<\/a><\/p>\n\n\n\n<p>Car Trade is a multi-channel auto platform with coverage\nand presence across vehicle types and value-added services. The platforms of\nCar Trade operate under several brands: CarWale, CarTrade, Shriram Automall,\nBikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. Through these platforms,\nthe company enables new and used automobile customers, vehicle dealerships,\nvehicle OEMs and other businesses to buy and sell their vehicles in a simple and\nefficient manner. Their vision is to create an automotive digital ecosystem\nwhich connects automobile customers, OEMs, dealers, banks, insurance companies\nand other stakeholders.<\/p>\n\n\n\n<p>&nbsp;<strong>Industry Growth Drivers<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>India\u2019s Gross National Income per capita is\nexpected to grow at a CAGR of approximately 11% between the calendar years 2020\nand 2025.<strong><\/strong><\/li><li>Internet and smartphone penetration in India has\nnearly doubled from 2015 to 2020. By 2025, India is expected to cross 950 million\ninternet users and 800 million smartphone users.<\/li><li>According to Auto Gear Shift India 2020, over\n92% of the buyers of new and used cars research online.<\/li><li>Government policies such as \u2018Make in India\u2019,\nFAME (faster adoption and manufacturing of hybrid and electric vehicles) and\nProduction-Linked Incentive (\u201cPLI\u201d) schemes will support automotive industry.<strong><\/strong><\/li><li>In India, the parc turn rate, which is the total\nnumber of used cars sold divided by the total volume of cars, is approximately\n16%. Used car market in India is relatively smaller than other countries.<\/li><li>Used car market in India is expected to grow at\na CAGR of at least 11% in the next five years.<\/li><li>Used two-wheeler market is expected to grow at a\nCAGR of at least 8% predominantly run by the unorganized sector.<\/li><li>In 2020, 17% of used cars were purchased with\nauto finance, compared to 75% for new cars. Auto finance, in pre-owned vehicles\nmarket, is a highly under-penetrated market thus has potential for growth.<\/li><\/ul>\n\n\n\n<p><strong>Peers\nComparison<\/strong><\/p>\n\n\n\n<p>The company has no listed peer.<\/p>\n\n\n\n<p><strong>Financials<\/strong><\/p>\n\n\n\n<p><strong>Revenue from\noperations (Rs. in millions)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"463\" height=\"301\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-197.png\" alt=\"\" class=\"wp-image-886\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-197.png 463w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-197-300x195.png 300w\" sizes=\"auto, (max-width: 463px) 100vw, 463px\" \/><\/figure>\n\n\n\n<p><strong>Observations<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Total revenues of the company have marginally increased\nby 2.72% in last two years.<\/li><li>Revenues have plunged by 11.6% on yearly basis.<\/li><li>Car Trade generates 64% of their revenues from\nthe Commissions on generating sales of new and used vehicles from OEM (Original\nEquipment Manufacturer), dealers and retailers.<\/li><li>The online automotive platform generates 35% of\ntheir revenues from website services such as lead generation and fees from\nproviding auction facility and inspection and valuation of used vehicles\nfacility.<\/li><\/ul>\n\n\n\n<p><strong>Financial Statements<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"\"><tbody><tr><td>\n  Income Statement (In Millions)\n  <\/td><td>  FY21<\/td><td>   FY20<\/td><td>   FY19   <\/td><\/tr><tr><td>\n  Gross Operating Income\n  <\/td><td>\n  2815.23\n  <\/td><td>\n  3184.45\n  <\/td><td>\n  2668.05\n  <\/td><\/tr><tr><td>   Cost of Employee &amp; Inventory   <\/td><td>\n  1313.63\n  <\/td><td>\n  1502.18\n  <\/td><td>\n  1276.10\n  <\/td><\/tr><tr><td>\n  Other Expenses\n  <\/td><td>\n  789.59\n  <\/td><td>  1084.41   <\/td><td>\n  861.65\n  <\/td><\/tr><tr><td>\n  EBITDA\n  <\/td><td>\n  712.01\n  <\/td><td>\n  597.86\n  <\/td><td>\n  530.3\n  <\/td><\/tr><tr><td>\n  Depreciation\n  <\/td><td>\n  199.27\n  <\/td><td>\n  173.82\n  <\/td><td>\n  152.18\n  <\/td><\/tr><tr><td>\n  Interest \n  <\/td><td>\n  42.98\n  <\/td><td>\n  34.89\n  <\/td><td>\n  23.81\n  <\/td><\/tr><tr><td>\n  Profit Before Tax\n  <\/td><td>\n  469.76\n  <\/td><td>\n  389.15\n  <\/td><td>\n  354.31\n  <\/td><\/tr><tr><td>\n  &nbsp;Tax\n  <\/td><td>\n  -540.98\n  <\/td><td>\n  76.21\n  <\/td><td>\n  95.14\n  <\/td><\/tr><tr><td>\n  Profit After Tax\n  <\/td><td>  1010.74<\/td><td>   312.94   <\/td><td>   259.17   <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Company\u2019s revenue is marginally increased by 2.72% in last two years.<\/li><li>EBITDA margins of the company stood at 25.3% in FY21 increased from 18.8% in FY20. <\/li><li>Company has free cash flows at Rs. 22 cr. to operate its functions smoothly.<\/li><li>The firm has no debt at all; however its interest payments are directed to lease liabilities.<\/li><li>PAT grew by 222% in FY21 on account of deferred tax credit.<\/li><li>Return on Equity or Net Worth is 5.43% <\/li><li>Enterprise value of the company is 7,393 cr.<\/li><li>EV\/Sales of the company stood at 26 times while EV\/EBITDA is 103.83x.<\/li><li>Considering the upper price band at Rs. 1,618 and FY21 Earning Per Share (EPS) of Rs. 22.09, the company is demanding a P\/E multiple of 73.24x.<\/li><\/ul>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.invest19.com\/blog\/paytm-and-mobikiwk-filed-their-drhp-to-market-regulator-sebi\/\">Paytm and Mobikiwk filed their DRHP to market regulator SEBI<\/a><\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 2,817<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"884\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">5    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>After a stellar subscription status of Devyani Int., Krsnaa Diagnostics, Exxaro Tiles and Windlas Biotech investors are gathering funds for the IPO of online automotive [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/car-trade-ipo-will-hit-the-primary-market-on-aug-09-should-you-subscribe\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":887,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,2,48,7,10],"tags":[],"class_list":["post-884","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-stock-market","category-economy","category-investment","category-featured"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=884"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/884\/revisions"}],"predecessor-version":[{"id":888,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/884\/revisions\/888"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/887"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}