Shares of CarTrade Tech rallied nearly 17% in opening trade on Tuesday after the online auto classifieds platform inked a deal to buy OLX India's auto sales business for cash consideration of ₹537.43 crore. The multi-channel auto platform will acquire a 100% stake in Sobek Auto India, the arm which operates OLX India’s auto sales segment from OLX India B.V. The timeline for the completion of the transaction is 21-30 days or as may be mutually decided between the parties.
“CarTrade Tech has entered into a share purchase agreement with Sobek Auto India Private Limited, and its holding company OLX India B.V. for the acquisition of 100% stake of Sobek from OLX India B.V,” the company said in an exchange filing on Monday.
The deal is “subject to completion of certain conditions and on the terms and conditions agreed between the parties in the share purchase agreement”.
As per the company, the acquisition is in line with its strategic objectives to undertake investments which provide synergistic benefits to the existing businesses of the CarTrade Tech.
Cheering the news, CarTrade Tech shares opened 7.2% higher at ₹521.95 against the previous closing price of ₹486.85 on the BSE. Extending opening gains, the stock jumped 17% to hit a high of ₹569.50, while the market capitalisation surged to ₹2,604 crore. There was spurt in volume trade as 54,000 shares changed hands over the counter on the BSE compared with two-week average volume of 9,761 stocks.
The smallcap stock has risen 67% against its 52-week low of ₹341.05 touched on March 29, 2023, while it trades 22% lower than its 52-week high of ₹735 hit on July 29, 2022.
In the last one year, the counter has fallen 17%, while it has risen 20% in the six month period. In the past one month, the stock climbed 10%, whereas it added nearly 14% in a week.
Formed in 2018, Sobek is engaged in the business of running an automotive digital platform and a classifieds internet business. On June 30, 2023, Sobek acquired the classifieds internet business from OLX India on the terms and conditions agreed under a business transfer agreement.
As part of the acquisition, Sobek entered into an intellectual property license agreement and a transitional support agreement for the use of certain brands and technology.
Backed by global investors such as JPMorgan, Warburg Pincus, March Capital, and Temasek, CarTrade Tech facilitates a platform for the buying and selling of new and used cars, vehicle dealerships, vehicle OEMs, and other businesses. The platforms operate under several brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz.
For the fourth quarter ended March 2023, CarTrade Tech posted a consolidated net profit of ₹17.49 crore against a net loss of ₹21.39 crore in the year ago period. The revenue jumped 13% year-on-year (YoY) to ₹116.1 crore in Q4FY23, compared with ₹102.8 crore in the same quarter a year ago.
For the full financial year, the net profit stood at ₹40.43 crore versus net loss of ₹121.35 crore in FY22. The net revenue increased by 20% to ₹421.26 crore from ₹350.2 crore in the previous fiscal.
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