Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

CarTrade Tech aims to raise around US$400m in its India IPO. The company is backed by Warburg Pincus and Temasek.CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.We have covered various aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/cartrade-tech-pre-ipo-acquisition-adjusted-growth-remains-lows" target="_blank" rel="noopener">CarTrade Tech Pre-IPO - Acquisition adjusted growth remains low</a>.In this note, we will run the deal through our ECM framework and talk about pricing.

CarTrade Tech aims to raise around US$400m in its India IPO. The company is backed by Warburg Pincus and Temasek.CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.We have covered various aspects of the deal in our previous note, CarTrade Tech Pre-IPO - Acquisition adjusted growth remains low.In this note, we will run the deal through our ECM framework and talk about pricing.

Cartrade Tech IPO - Too Expensive for Our Taste

CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg Pincus and Temasek.
CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.
In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. 
Overall reported revenue grew by 96.9% in FY19 and was up another 22.6% in FY20. While 9M21 revenue points towards a YoY decline in revenue, its user growth has been progressively getting better throughout FY21 showing a strong rebound from COVID-19.
Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.

CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg Pincus and Temasek.
CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.
In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. 
Overall reported revenue grew by 96.9% in FY19 and was up another 22.6% in FY20. While 9M21 revenue points towards a YoY decline in revenue, its user growth has been progressively getting better throughout FY21 showing a strong rebound from COVID-19.
Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.

CarTrade Tech Pre-IPO - Acquisition Adjusted Growth Remains Low

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/cartrade-tech-ltd" target="_blank" data-smartkarma-citation="entities:33474:1" rel="noopener">Cartrade (0056989Z IN)</a> is a leading online destination for auto consumers in India. CarWale and BikeWale, key brands owned by CarTrade, ranked number one on relative online search popularity when compared to their key competitors over the last three years, according to Google Trends data. CarTrade’s shareholders include Warburg Pincus (34.44% of fully diluted shares), Temasek (26.48%), JP Morgan (11.93%) and March Capital (7.09%). CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India, according to press reports. The IPO comprises a pure offer for sale of 18.53 million shares by its existing shareholders and promoters. The IPO is set to launch on 9 August.  India was the fifth largest car market in the world in 2019 and is forecasted to become the third-largest auto market in the world as measured by volume in 2025, according to RedSeer. The COVID-19 pandemic has also resulted in a shift in preference towards used cars as people limit their use of public transportation. Indian auto OEMs spent only 14% of their total ad budgets on digital advertising, which is significantly lower than the global average of 42% in 2020, according to RedSeer. <div class="content-highlight">The growing auto market combined with the rising penetration of digital ad spend presents an attractive opportunity for auto transaction platforms such as CarTrade. CarTrade is capitalising on this market opportunity as evidenced by its highly popular platforms, solid organic growth, strong margins and healthy cash generation. Overall, we think that CarTrade is an attractive play on India’s new economy sector.</div>

Cartrade (0056989Z IN) is a leading online destination for auto consumers in India. CarWale and BikeWale, key brands owned by CarTrade, ranked number one on relative online search popularity when compared to their key competitors over the last three years, according to Google Trends data. CarTrade’s shareholders include Warburg Pincus (34.44% of fully diluted shares), Temasek (26.48%), JP Morgan (11.93%) and March Capital (7.09%). CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India, according to press reports. The IPO comprises a pure offer for sale of 18.53 million shares by its existing shareholders and promoters. The IPO is set to launch on 9 August.  India was the fifth largest car market in the world in 2019 and is forecasted to become the third-largest auto market in the world as measured by volume in 2025, according to RedSeer. The COVID-19 pandemic has also resulted in a shift in preference towards used cars as people limit their use of public transportation. Indian auto OEMs spent only 14% of their total ad budgets on digital advertising, which is significantly lower than the global average of 42% in 2020, according to RedSeer. The growing auto market combined with the rising penetration of digital ad spend presents an attractive opportunity for auto transaction platforms such as CarTrade. CarTrade is capitalising on this market opportunity as evidenced by its highly popular platforms, solid organic growth, strong margins and healthy cash generation. Overall, we think that CarTrade is an attractive play on India’s new economy sector.

CarTrade Tech IPO Initiation: Shifting Gears

Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Internet IPOs are turning out to be the theme of the year in India so far. In yet another instance, <a href="https://www.smartkarma.com/entities/cartrade-tech-ltd" target="_blank" data-smartkarma-citation="entities:33474:1" rel="noopener">Cartrade (0056989Z IN)</a>, operator of Carwale, and Bikewale lately received SEBI's nod of floating the public issue.
Cartrade, along with its subsidiaries, operates an automotive digital ecosystem which connects automobile customers, OEMs, dealers, banks, insurance companies and other stakeholders. The Group owns and operates under several brands: CarTrade, CarWale, Shriram Automall, BikeWale, etc. Through these platforms, the group enables new and used automobile customers, vehicle dealerships, automotive manufacturers and other businesses to buy and sell their vehicles.
While the auto tech platforms have several players in the Industry, CarTrade is the first one in the line to get listed. The company also reported in the DRHP that it is the only competitor to boast a positive net income, while also ranking number one on relative online search popularity when compared to their key competitors over the period from April 2020 to March 2021. 
However, on the flip side CarTrade also undergoes several shortfalls on the balance sheet end. A simple forensic check of DRHP reveal issues like aggressive revenue recognition, worrying cash yield, fragile earnings, etc.

Internet IPOs are turning out to be the theme of the year in India so far. In yet another instance, Cartrade (0056989Z IN), operator of Carwale, and Bikewale lately received SEBI's nod of floating the public issue.
Cartrade, along with its subsidiaries, operates an automotive digital ecosystem which connects automobile customers, OEMs, dealers, banks, insurance companies and other stakeholders. The Group owns and operates under several brands: CarTrade, CarWale, Shriram Automall, BikeWale, etc. Through these platforms, the group enables new and used automobile customers, vehicle dealerships, automotive manufacturers and other businesses to buy and sell their vehicles.
While the auto tech platforms have several players in the Industry, CarTrade is the first one in the line to get listed. The company also reported in the DRHP that it is the only competitor to boast a positive net income, while also ranking number one on relative online search popularity when compared to their key competitors over the period from April 2020 to March 2021. 
However, on the flip side CarTrade also undergoes several shortfalls on the balance sheet end. A simple forensic check of DRHP reveal issues like aggressive revenue recognition, worrying cash yield, fragile earnings, etc.

India

Cartrade Tech Ltd operates an online market place for the exchange of used cars. The Company offers users to post, search, sell, and purchase used vehicles.

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CarTrade (CARTRADE IN)

Cartrade Tech IPO - Too Expensive for Our Taste

CarTrade Tech aims to raise around US$400m in its India IPO, via a 100% secondary selldown. The company is backed by Warburg Pincus and Temasek.

Sumeet Singh

CarTrade Tech Pre-IPO - Acquisition Adjusted Growth Remains Low

CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg and Temasek, and claims to be the most popular auto...

Sumeet Singh

CarTrade Tech IPO Initiation: Shifting Gears

CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India. Overall, we think that CarTrade is an attractive play on India’s...

Arun George

CarTrade Tech IPO- A Patchy Drive

CarTrade undergoes several shortfalls on the balance sheet end. A simple forensic check of DRHP reveal issues like aggressive revenue recognition,...

Nitin Mangal

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