HISTORY OF CAR TRADE
The Company was established as a private limited company on April 28, 2000, in Mumbai, Maharashtra, in accordance with the Companies Act 1956. The Registrar of Companies Maharashtra issued the Company a certificate of incorporation (RoC). After a special resolution adopted by our shareholders at the EGM held on July 31, 2009, the Company’s name was later changed to “MXC Solutions India Private Limited,” and a new certificate of incorporation was issued by the RoC on August 12, 2009. In compliance to a special resolution adopted by the shareholders at the EGM held on March 31, 2021, the company’s name was subsequently changed to “Car Trade Tech Private Limited,” and a new certificate of incorporation was issued by the RoC on April 20, 2021. According to a special resolution adopted by the Shareholders at the EGM held on April 29, 2021, the Company was transformed from a private limited company to a public limited company, and its name was changed to “Car Trade Tech Limited.” The business runs a digital automotive ecosystem that links auto customers, OEMs, dealers, banks, health insurers, and other players. The business owns and runs a number of brands, including CarTradeCarwale and AutoBiz.
Through these platforms, the company makes it easy and effective for dealerships, OEMs, and other businesses to acquire and sell new and old cars. The company issued a capital raising (IPO) in August 2021, selling 18532216 equity shares at Rs 10 a piece for a price of Rs 1618, for a total of up to Rs 2998.15 crore. On August 20, 2021, the allotted outstanding shares on the BSE Ltd. and National Stock Exchange (NSE). Vinay Sanghi, an expert in the Indian auto sector with over two decades of experience, predicted that the nation’s expanding middle class would also purchase cars online (Almost 80 percent of consumers check online before buying a car). They would also search for a platform where they could purchase and sell used cars as the lifecycle for purchasing a car shortens. When Vinay Sanghi founded Car Trade, he had the same thought. The start-up was included in Forbes’ top 10 list of India’s most targeted e-commerce companies.
ABOUT THE FOUNDER
It is crucial for entrepreneurs to have extensive knowledge in the industry they are trying to enter if they want to address a major pain issue. Regardless of the particular area of the sector the problem is in. It is safe to assume that if you, as an entrepreneur, don’t have the knowledge or are unfamiliar with the industry in which you want to launch your firm, whether it be consumer-related or growth-related, you don’t fully understand the scope of the issue you are attempting to address. Clearly, Vinay Sanghi, the founder of a well-known auto classifieds website in our nation, was not like that. Car Trade. Before founding Car Trade, Vinay Sanghi had twenty years of experience in the auto sector. Vinay worked in the Sah and Sanghi family dealership between the years 1992 and 1999. After completing his education at Sydenham College, he assumed control of the firm’s management. When he was working for his company, he recognized that the used automobile market in India was disorganised and fragmented, and that another platform where individuals could buy, sell, or find dealers who had used or new cars was urgently needed. His company worked with Mahindra & Mahindra and HDFC to create a joint venture named Mahindra First Choice to address this problem.
He served as the joint venture’s CEO and over a number of years, he successfully organised the sector’s fragmentation and gradually cultivated the culture of “Used Cars” throughout the nation. When the nation was rocked by the eCommerce tsunami in 2009, he made the decision to leave the business and start Car Trade. He claims that Mahindra First Choice’s goal was to create a positive shopping experience for used car consumers while maintaining a high standard of quality. Additionally, he perceived the desire of a whole new middle-class segment to get its first automobile. Early on in the game, he realised that the expanding middle class in India was happy with purchasing second-hand automobiles, and that 80% of them might research the vehicles online before making a purchase. When a new car was purchased in 2008, the owner typically kept it for 8 years before replacing it. However, things have changed significantly since then. Nowadays, a car owner searches for a replacement every four to five years on average. In India, used automobile sales outpace new car sales by roughly three to one. With this, Vinay revolutionised the previously fragmented industry and also turned his firm into a massively big, organised used car reseller at the perfect time and with the numbers already on his side.
Car Trade functions as a platform both for B2B and B2C (business to business) transactions (business to consumer) Dealers can sell their old inventory, and financial firms can use Car Trade Exchange to auction off their repossessions. But at the other hand, users of the platform can purchase and sell automobiles. Customers can browse new and also used car models and get an immediate on-road price according to their region. Additionally, they can calculate their EMI based on their budget and compare cars. – Visit Chaturideas.com for more information on Vinay Sanghi, the founder and CEO of our nation’s top auto classifieds network. At peak capacity, Car Trade employs more than 350 people, and around 250 of them work on the team that prepares dealers for auction sites. With 32 million foreign monthly per month to their website, they auction off 8,000+ autos each month.
Currently, Car Trade has a partner network of 10,000 new and used automobile dealers. Temasek, a Singapore-based investment company, and March Capital, a global venture capital investment business, recently helped Car Trade raise Rs 950 crores. Car Trade had previously secured $30 million from Warburg Pincus, Tiger Global, and Canaan Partners in the month of October 2014. – Visit Chaturideas.com for more information on Vinay Sanghi, the founder and CEO of our nation’s top auto classifieds network. According to reports, the market for used automobiles is expanding at a rate of 18 to 20 percent each year, and Car Trade, thanks to its most recent acquisition of Carwale, is at the top of the pecking order. Vinay’s Car Trade acquired a 90% share in CarWale in the month of November, which was a smart move given that CarWale was performing well in the New Cars Category. Vinay successfully expanded his company’s dealer network and elevated Car Trade to the top of the national Auto Classifieds by acquiring CarWale.
According to Vinay, the ongoing funding in Car Trade is proof of the company’s business strategy and expansion goals in the Indian online vehicle market. Additionally, he says that the money would be used to acquire businesses, increase their service offerings, and improve both their technology capabilities and offerings. Currently, players like Gaadi.com, Zig Wheels, Oncars.in, Zoomo, CredR, Car Dekho, etc. directly compete with CarTrade.com. Indirect rivals of theirs include OLX and Quikr.
A multi-channel automobile platform called Car Trade Tech supports many cars makes and models as well as value-added services. Their platforms, CarWale and BikeWale, came in first for the popularity of internet searches. One of the most well-known locations for used car auctions is Shriram Auto mall (their platform). Car Trade is the only profitable automotive digital platform among its rivals. On the CarWale and Car Trade platforms, car purchasers can engage with dealers, OEMs (original equipment manufacturers), and other partners to sell and buy new and used vehicles. The platforms also provide financial assistance and provide supplementary goods and services for the automotive industry. On BikeWale, customers may interact with dealers, OEMs, and other partners to sell and buy the new and used two-wheelers that they are offering. Only previously owned two- and three-wheelers, cars, trucks, and farm construction equipment are sold on the Shriram Automall platform.
A vehicle Enterprise Resource Planning (ERP) tool is called Car Trade Exchange. Automobile dealers utilise Car Trade Exchange to handle their purchasing, customer relationship management, and inventory management (CRM). The automotive platform from Adroit Auto is used by banks, insurance firms, and other financial organisations for inspection and valuation services. To assist new car dealers, handle their customers more efficiently, AutoBiz provides a CRM solution.
HOW IT CREATES PROFITS
- COMMISSION for used-car auction and remarketing services.
- solutions for online advertising across several platforms.
- LEAD gen for dealers, OEMs, etc.
- Banks, insurance firms, and OEMs can use our inspection and valuation services.
- Services based on technology for OEMS, dealers, etc.
JP Morgan and Warburg Pincus will sell roughly 40% and 51% of their shares in the company, respectively, and get up to 236 and 181 percent of their original investment as profit. Due to significant share sale by private investors, the public holding will increase to 40%. The selling shareholders’ bank accounts will receive a direct deposit of the sale’s revenues. No funds will be used for Car Trade’s business activities; all funds will be raised through Offer for Sale. It is launching on the markets to increase visibility, build brand recognition, and give shareholders liquidity. Revenue from operations increased by 23% between FY 19 and FY 20, but it then sharply dropped, declining by 16% between FY 20 and FY 21. Even after taking into account the inconvenience caused by the national lockdown in the final week of March, revenue from operations only increased by 25% in FY20 and dropped in FY21.EBITDA hasn’t increased significantly either. The company’s receipt of a tax credit is what caused the increase in profit after taxes in FY 21. The business has a robust balance sheet, no debt, and a track record of creating positive free cash flows.
|Average Monthly Unique Visitors (in million)||27.11||25.66||20.51||19.27|
|Average Monthly Unique Organic Visitors (in million)||24.85||23.42||14.54||13.04|
|Number of Vehicles Listed for Auction||212,552||814,316||809,428||709,190|
|Number of Vehicles Sold by Auctions||30,133||156,689||197,986||199,529|
Organic Sources is completely independent of Google or other advertisements. The number of Organic monthly users is quite high, demonstrating the brand’s visibility.
India’s used automobile market is quite tiny when compared to other wealthy nations. According to the parc turn rate in India, which is calculated by dividing the total number of used cars sold by the entire volume of cars, there is room for significant future growth in the used car market. Comparatively speaking, Car Trade tech is the only profitable unlisted company. Cars 24 showed the incredible scale-up that is possible by reaching the same income in 5 years that Car Trade did in around 11 years. International Peers generate 30–50 times greater revenue than Car Trade while trading at 16–25 P/S. Therefore, Car Trade may be slightly overvalued with high valuations when compared to its international competitors. Domestic rivalry is becoming more intense.
By 2025, India is expected to overtake China as the third-largest automotive market in terms of volume due to important factors like digitization, shifting consumer behaviour, and new services. India’s used automobile market is quite tiny when compared to other wealthy nations. Although Car Trade is the sole profitable business in this industry, the domestic rivals are getting ready and are starting to catch up with the numbers. In comparison to its international peers, it appears to be overvalued with an EPS of Rs. 19.2 and 84x P/E. In FY 21, revenues decreased instead of growing significantly. The management is highly skilled, has extensive knowledge of the sector, and upholds a strong and reliable reputation.
As a multi-channel auto platform, they offer coverage for all vehicle types as well as value-added services. CarWale, Car Trade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz are a few of the names used by their platforms. Through these platforms, they make it possible for buyers and sellers of new and used cars, as well as auto dealers, OEMs, and other companies, to do so quickly and easily. The goal is to establish a digital automotive ecosystem that links auto buyers, OEMs, dealers, banks, insurance providers, and other interested parties.
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