“I have been associated with CarWale for more than six years now,” adds Atul Singhal, CEO, Wasan Toyota, Mumbai. “CarWale has done a fantastic job in helping me take my business to where it is today. The sales they generate for my dealership are amazing”. “I cannot dream of any of the dealerships doing business without CarWale,” adds Singhal.

CarTrade Tech offers a variety of solutions across the automotive transaction value chain, from discovery and research tools, pricing and auto financing information to connecting consumers with dealers and OEMs for both used and new vehicle purchases. Arvind Kumar, owner, Fast Track Wheels, Mumbai, is quite happy with his 10-year-long relationship with CarWale and the services such as certification and warranties on used cars. “This helps build the consumer confidence in these cars,” he says.

According to RedSeer, in 2019-20, Indian car and two-wheeler OEMs spent only about 14 per cent of their total advertising budgets on digital advertising, which is significantly lower than the 42 per cent global average for OEMs in calendar year 2020. The automotive sector has been amongst the three largest contributing sectors to the digital advertising market in India, in terms of amount spent. Digital marketing spends by OEMs are expected to increase in line with the growth of the digital advertising market in India, which has been growing at a CAGR of about 20 per cent from 2017-18 to 2019-20. 

“The number of used car dealers in India subscribing to paid services on online automotive portals is expected to increase from about 4,000 dealers in 2019-20 to 8,000-11,000 dealers in 2024-25. We believe that we shouldbenefit from the shift to digital by OEMs and dealers.” Sanghi hopes.

Anshumali Dixit, AVP, Asset Management, Tata Capital Financial Services, describes CarTrade as “a most trusted channel partner”. “The quality of service provided during each and every online auction event is conducted in smooth and seamless manner,” Dixit adds.

The used commercial vehicle market in India too is expected to grow from 1 million units in 2019-20 to 1.5-1.7 million units in 2024-25. CarTrade Tech hopes its subsidiary Shriram Automall will benefit from the growth of both the used car market and the used commercial vehicle market, as also from the shift to more organised players, resulting in more transactions. 

Multi-vehicle approach

“Leveraging our brands,” says Sanghi, “we provide services across different vehicle categories, including new and used cars, new and used two-wheelers and used commercial vehicles and farm equipment.” The multi-vehicle approach increases CarTrade’s efficiencies and profitability. Moreover, the company works closely with banks, insurance companies, and other business partners.

Dhaval Seth of Autolink Hero, a two-wheeler principal dealer, is all praise for BikeWale. “They are the best, compared to any other two-wheeler portals. The support they give dealers like us is amazing,” Seth says. He recommends every OEM and two-wheeler dealer to get associated with BikeWale and dramatically grow their businesses.

CarTrade Tech’s total income has increased at a CAGR of 45.94 per cent between 2017-18 and 2019-20. The company’s total income for 2019-20 was Rs318.4 crore. The adjusted EBIDTA margin was 26.46 per cent for the nine months ended 31 December 2020 and 22.71 per cent for 2019-20.

“CarTrade became profitable in 2018-19, with a restated profit of Rs25.9 crore,” says Aneesha Menon, Executive Director and Chief Financial Officer of CarTrade Tech. 

CarTrade Tech is now going public and has just filed its Draft Red Herring Prospectus with the market regulator SEBI. The issue is a complete offer for sale of 12,354,811 equity shares by investors and other selling shareholders. Investors CMDB, Highdell Investment, MacRitchie Investments and Springfield Venture International, and promoters Bina & Vinod Sanghi, Daniel Edward, Shree Krishna Trust, Steve Greenfield, Victor Anthony Perry and Vinti Rajesh Gajree will partially exit. Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital Co and Nomura Financial Advisory and Securities (India) are the managers to the issue from which the company will not receive any funds.

CarTrade Tech plans to get into vehicle servicing, automobile accessories and automobile insurance by engaging with product and service providers, Sanghi says. The company has already offered software and technology service to automotive clients domestically and now plans to grow that business internationally and invest in new trends such as connected vehicles, electric vehicles, ridesharing and vehicle subscription services.