As per a filing issued to the stock market by CarTrade, it is getting ready to purchase the automotive division of OLX India in a transaction estimated to be for Rs 537 crore. OLX Autos has been looking for a possible buyer, and it seems that CarTrade is the one they have been looking for. CarTrade is an online car classifieds platform.
According to a National Stock Exchange filing, CarTrade Tech Limited has acknowledged that it has signed a share purchase agreement with Sobek Auto India Private Limited (Sobek) and its parent business, OLX India B.V.
CarTrade intends to acquire every share of Sobek Auto India Pvt Ltd. Sobek Auto India Pvt Ltd is the company that includes OLX India’s automotive division. It is an all-cash deal, as stated in a stock market filing on Monday. It is anticipated that the purchase procedure would be completed in 21 to 30 days.
OLX made the decision to discontinue its OLX Autos activities in various nations back in March of this year. Before deciding on CarTrade, OLX had contemplated combining with other businesses in the industry, according to sources from Entrackr. Over 800 workers were recently let go by the corporation, many of them were from India.
This purchase is a strategic move for CarTrade, which has had some issues since becoming public. The company’s shares are presently trading for about Rs 486 per share, or around $278 million, after being listed on the NSE in August 2021 for over Rs 1,600 per share.
As reported by Economic times, CarTrade’s statement was “This acquisition is in line with the company’s strategic objectives of making investments that offer synergistic benefits to CarTrade’s existing businesses.”
It was unable to estimate Sobek’s financial performance for FY23, however it is known that in FY22, the firm had a significant increase in gross revenue (commonly referred to as GMV), rising to Rs 1,110.4 crore from Rs 592.3 crore.
Overall, as a consequence of this announcement, shares of CarTrade Tech increased by approximately 15% in early trading on July 11.
Analysis of this Marketing News
CarTrade has the chance to broaden its client base and increase its business presence by acquiring OLX Autos. CarTrade now has a competitive advantage in the vehicle classifieds market thanks to this purchase. Additionally, it gives access to a wider audience, which ought to increase Cartrade Tech’s market share.
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