CARS24, CarDekho gearing up for IPOs, could raise over $1B
What's the story
India's leading online used car platforms, CARS24, CarDekho, and Spinny, are gearing up for potential initial public offerings (IPOs) in the next 12-18 months, according to Bloomberg. The companies are in preliminary discussions with bankers to gauge investor interest and determine restructuring needs for their businesses. Their combined stock offerings could generate over $1 billion. The move comes as they look to tap into the growing investor interest in domestic-focused businesses in India, world's third busiest IPO market this year.
Restructuring efforts
Major operational overhaul
SoftBank-backed CARS24 has undertaken a major operational overhaul in the last year. The company has laid off hundreds of employees from its non-core units, product, and tech teams. It has also shut down its enterprise spare-parts venture Inspare and car-servicing business FourDoor, to focus on its core used-car marketplace. This is part of a broader trend among these companies to streamline operations amid rising pressures to become profitable quickly.
Strategic shifts
Slowdown in expansion and fresh capital requirements
CarDekho, which was planning to file its IPO papers in early 2025, has now pushed those plans. The company is said to be merging its insurance arm, InsuranceDekho, with RenewBuy. Spinny (Valuedrive Technologies Pvt.), on the other hand, has slowed down expansion and is looking for fresh capital. Smaller rival Droom has restructured its business to focus on premium/luxury segments and is looking to refile IPO documents after cutting costs amid falling revenues over the last two years.
Market performance
Publicly traded company in the online used car space
CarTrade Tech Ltd., which owns the CarWale and CarTrade platforms, is the only publicly traded company in this business. Its 2021 IPO was oversubscribed by 20 times. The company's shares have risen 63% this year, outperforming the NSE Nifty 50 Index's gain of about 7%. This shows a strong market performance and investor interest in India's online used car industry.