IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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.

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<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 India's largest digital marketplace ecosystem for buying, selling, marketing, and financing new and pre-owned vehicles. The company's platforms, including CarWale, BikeWale, CarTrade, OLX India, and Shriram Automall, empower consumers, dealers, OEMs, and enterprises to transact vehicles and other goods. It offers services like new and used car solutions, two-wheeler solutions, and technology solutions for OEMs and dealers. Headquartered in Navi Mumbai, India, the company was founded in 2000.

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CarTrade Tech (CARTRADE IN)

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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