Mumbai-based auto marketplace CarTrade’s initial public offering (IPO) was oversubscribed 20.29 times on the closing day of the subscription on Wednesday (August 11). The three-day IPO received bids for 263,174,823 shares against 12,972,552 shares on offer, according to data from the bourses.
The IPO had a slow start as the net subscription status stood at 99% of the total offering in the first two days. However, it had been oversubscribed 1.53 times by retail individual investors at the end of its second day of subscription on Tuesday (August 10).
After the three days, the category for qualified institutional buyers (QIBs) garnered 35.45 times subscription, while the portion reserved for non-institutional investors was oversubscribed 41 times. Retail investors oversubscribed the CarTrade IPO 2.75 times.
The Mumbai-based startup is looking to raise about INR 3,000 Cr via a combined sale and issue of 18.5 Mn equity shares in the company at a market capitalisation of up to INR 7,416 Cr — which will give it a unicorn valuation.
While the IPO price band has been set at INR 1,585- INR 1,618 per share — a retail investor would have to shell out at least INR 14,265 to get an allotment as the minimum lot size has been set at 9 shares. This means that approximately 6.5 Mn shares — or 35% of the issue — can be availed by retail investors.
CarTrade raised INR 899.5 Cr from anchor investors last week, according to a statement on the exchanges. Nomura Funds, HSBC Global, Goldman Sachs, Mirae Asset Large Cap Fund, SBI Life Insurance, Jupiter India Fund, Elara India Opportunities Fund, Aditya Birla Sun Life Insurance Company, Bajaj Allianz Life Insurance Company, Bharti Axa Life Insurance Company, Axis Mutual Fund (MF), HDFC MF, Kotak MF and Sundaram MF are among the anchor investors. Out of the total allocation, 33.35% was allocated to nine domestic mutual funds through a total of 30 schemes.
Up to 50% of the net offer shall be available for allocation to qualified institutional buyers (QIB), with at least 15% reserved for non-institutional bidders and at least 35% allocated to retail individual bidders.
Founded in 2009 by Vinay Sanghi, a former chief executive officer of Mahindra First Choice and Rajan Mehra, former country head of eBay, CarTrade is an Indian multi-channel auto market place, offering both new and used vehicles to customers through platforms such as CarTrade, Carwale, CarTradeExchange, Shriram Automall, Adroit Auto, Auto Biz, and BikeWale. CarTrade group has over 40 OEMs, 15,000+ dealers, and has 180 owned or franchise stores.
In terms of consolidated revenue, the startup has posted INR 318 Cr in revenue overall, with INR 298 Cr as revenue from operations. It reported a net profit of INR 31.2 Cr in FY20. For FY21, it reported operating revenue of INR 249 Cr with a net profit of more than INR 101 Cr, as a result of a massive cut in spending on advertising, promotions and other marketing operations.