Leading multi-channel auto platform CarTrade Tech is expected to make a decent debut on the bourses considering its business model, the first-mover advantage in the sector and future growth prospects. Equity shares will list on the BSE and NSE on August 20.
The initial public offering of CarTrade saw a strong subscription during August 9-11, getting subscribed 20.29 times driven by institutional and non-institutional investors. The reserved portion of qualified institutional buyers was subscribed 35.45 times and that of non-institutional investors witnessed 41 times subscription. The retail portion was booked 2.75 times.
The company raised Rs 2,998.51 crore through its public issue that was a complete offer for sale by existing selling shareholders.
"Considering decent response from QIB and HNI, we assume listing would be with reasonable upside around Rs 1,780-1,800 levels, which translates to 10-12 percent premium over the upper end of the IPO price Rs 1,618 per share," Prashanth Tapse, VP Research at Mehta Equities, told Moneycontrol.
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"A decent listing gain seems to be justified as the issue being the first-of-its-kind business model in the segment and the only profit-making multi-channel auto platform business," he said.
Astha Jain, Senior Research Analyst at Hem Securities, is expecting a 5-7 percent gain on the listing of CarTrade Tech.
Also read - CarTrade IPO: Grey market premium on shares declines significantly ahead of listing
Currently, CarTrade Tech shares traded at a premium of Rs 150-170 in the grey market, resulting in a trading price of Rs 9.3-10.5 percent over the issue price of Rs 1,618 per share, the IPO Watch and IPO Central data showed.
CarTrade Tech is a multi-channel auto platform with coverage and presence across vehicle types and value-added services, operating under several brands namely CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.
Through these platforms, the company enables new and used automobile customers, vehicle dealerships, vehicle original equipment manufacturers (OEMs) and other businesses to buy and sell their vehicles in a simple and efficient manner.
The company generates revenues from several business streams primarily comprising commission and fees from auction and remarketing services, online advertising solutions, lead generation, and technology-based services.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.