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NEW DELHI: The Rs 2,999 crore initial public offer (IPO) of CarTrade, a tech-based firm involved in buying and selling of old cars, saw firm interest from investors on the first day of bidding on Monday.
By 5:00 pm, the issue received applications for 53,00,406 shares against on-offer 1,29,72,552 shares, meaning a subscription of 11 per cent. Besides, the company has already decided to allocate 55,59,664 equity shares to anchor investors at Rs 1,618 apiece, valuing the transaction size at Rs 899.55 crore.
The issue is an offer for sale (OFS) of up to 1,85,32,216 shares by existing selling shareholders being sold in the Rs 1,585-1,618 price band. At the upper end of the price band, the IPO is offered at 73.4 times price to earnings (P/E), 29.6 times (EV/sales), and 4.4 times price to book value (P/BV).
Analysts are largely positive on the issue, even as some of them worry over asking valuations. The valuations of the company seem to be stretched, said , while suggesting investors to subscribe the issue for listing gains. "Long-term investors are recommended to buy the stock on dips post listing," it said.
The company has no listed peers in India.
"At a higher price band of Rs 1,618, CarTrade's demanding EV/sales looks attractive, considering its scalable business model, profitable operations, and business growth opportunities in the auto sector value chain," said Choice Broking, while suggesting a 'subscribe' to the issue.
Anand Rathi said that if one excludes accounting adjustments for deferred tax and attributes it to equity, the asking price is at a P/E of around 199.26 times its FY21 earnings with a market cap of Rs 74,15.95 crore, which shows the IPO is priced exorbitantly.
By 5:00 pm, the issue received applications for 53,00,406 shares against on-offer 1,29,72,552 shares, meaning a subscription of 11 per cent. Besides, the company has already decided to allocate 55,59,664 equity shares to anchor investors at Rs 1,618 apiece, valuing the transaction size at Rs 899.55 crore.
The issue is an offer for sale (OFS) of up to 1,85,32,216 shares by existing selling shareholders being sold in the Rs 1,585-1,618 price band. At the upper end of the price band, the IPO is offered at 73.4 times price to earnings (P/E), 29.6 times (EV/sales), and 4.4 times price to book value (P/BV).
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View Latest Stock Report »Analysts are largely positive on the issue, even as some of them worry over asking valuations. The valuations of the company seem to be stretched, said , while suggesting investors to subscribe the issue for listing gains. "Long-term investors are recommended to buy the stock on dips post listing," it said.
The company has no listed peers in India.
"At a higher price band of Rs 1,618, CarTrade's demanding EV/sales looks attractive, considering its scalable business model, profitable operations, and business growth opportunities in the auto sector value chain," said Choice Broking, while suggesting a 'subscribe' to the issue.
Anand Rathi said that if one excludes accounting adjustments for deferred tax and attributes it to equity, the asking price is at a P/E of around 199.26 times its FY21 earnings with a market cap of Rs 74,15.95 crore, which shows the IPO is priced exorbitantly.
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