Who should invest in CarTrade IPO? Know with Anil Singhvi whether the company’s stock is cheap or expensive

CarTrade IPO: The IPO of online auto classifieds platform CarTrade Tech is opening today on Monday, August 9. The company has made a plan to raise Rs 2999 crore from the IPO. CarTrade Tech has kept the price band for the IPO at Rs 1585-1618. This IPO will be purely based on Offer for Sale (OFS). One can invest in this IPO till August 11. Zee Business Managing Editor Anil Singhvi has given his opinion on whether money should be invested in the issue of this new age business company. Know whether the price band for this issue is cheap or expensive in terms of valuation.

The market is liking the new business model

Anil Singhvi says that the business of CarTrade IPO Tech is of a new age, which is being liked by the market. Foreign investors have always liked companies with new business models. However, domestic investors are still understanding this type of business. Nevertheless, there is a significant number of investors who prefer this type of business model. The most important thing is that it is the only company in this space which is making a profit. The company is in profit. There is no shortage of cash. Therefore, if there is an ability to take risks, then you can invest money for listing gains in it. Risk means that the risk should be known about the business model.

What’s negative with the company

Anil Singhvi says that the negative is that this IPO is completely based on an offer for sale. That is, the existing investors are exiting by selling their stake. This may come to the notice of investors. Second, there is a lot of competition in this space due to the lack of entry barrier. The valuation of the third share is not cheap.

Totally Offer For Sale

This IPO will be purely offered for sale based. There will be the sale of 18,532,216 equity shares in the OFS. In this IPO 22.64 lakh shares will be sold by CMDB II, 84.09 lakh shares by Highdell Investment Ltd, 50.76 lakh shares by Macritchie Investments Pte Ltd, and 17.65 lakh shares by Springfield Venture International.

In the IPO, 50 percent is reserved for Qualified Institution Buyers (QIBs), 35 percent for non-institution investors, and 15 percent for retail investors. Warburg Pincus, Temasek, JP Morgan, and March Capital have investments in the company.

company’s business

Customers can buy and sell used or new cars through the CarTrade platform. Cartrade has a multichannel auto platform that covers all types of vehicles and value-added services. This platform includes CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto, and AutoBiz. Through these, 32 million consumers visit the company’s platform every month.

Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital Company, Nomura Financial Advisory and Securities (India) Private Limited are the investment bankers for the IPO.