CarTrade IPO subscribed 41% on Day-1 on strong retail interest

The bulk of the bids came from retail investors

The initial public offering (IPO) of CarTrade Tech was subscribed 41 per cent, while that of Nuvoco Vistas Corporation was subscribed 16 per cent on Monday, the opening day. Bulk of the bids on the first day came from retail investors.

Car Trade is a multi-channel auto platform that facilitates buying and selling of vehicles. It operates brands such as CarWale, CarTrade, Shriram Automall and BikeWale. The company’s IPO Rs 2,999-crore is entirely an offer for sale (OFS). The price band for the IPO is Rs 1,585-Rs 1,618 per share. at the top-end the company is valued at Rs 7,416 crore. For the year ended FY21, Cartrade had clocked revenues of Rs 250 crore and net profit of Rs 35 crore.

“We believe Car Trade offers an attractive opportunity to participate in a new age business with a leading vehicle platform company at P/B of 4.2 times and market cap-to-sales of 27 times,”said a note by Nirmal Bang.

Nuvoco Vistas’ IPO comprises fresh fundraise of Rs 1,500 crore and OFS of Rs 3,500 crore. The company is the country’s fifth largest cement company with an installed capacity of 22.32 million metric tonnes per annum. The company has set a price band of Rs 560-570 per share. At the top-end, Nuvoco will be valued at Rs 20,358 crore.

“At upper band the IPO is priced at 10x FY23E EV/EBITDA. Valuation is at discount to its large cap peers at 12x-19x FY23E EV/EBITDA. Discount partially factors high debt in its books and low ROCE,” says a note by IDBI Capital.