Exclusive: CarTrade turns a public company in run-up to IPO; appoints MD until FY26

A month after raising fresh funds, automobile classifieds portal CarTrade has converted its holding entity from a private limited company to a public limited company, a move that indicates it is close to filing its draft red herring prospectus.

The Mumbai-based company has passed a special resolution to convert the company from a private limited to a public company and change the name from CarTrade Tech Private Limited to CarTrade Tech Limited, regulatory filings show.

CarTrade would be the third prominent tech company from India to file for IPO in 2021. While gaming firm Nazara Technologies had already launched its IPO in January, foodtech company Zomato filed its DRHP in late April. Nykaa, Delhivery, Mobikwik and Flipkart are also expected to go for public listing this year.

Like Zomato, the board of CarTrade has approved the appointment of its founder and CEO as managing director of the company for the next five years. 

Vinay Vinod Sanghi has become MD for a period of five years effective from March 31, 2021, to March 30, 2026. The company has also approved Sanghi’s new remuneration in which he shall be payable Rs. 5.77 crore annually.

During the financial year ended March 31 of 2020, Sanghi’s remuneration was Rs 4.77 crore per annum and he controlled a 7.21% stake in the company as of April 29, 2021.

The board of CarTrade has also appointed Kishori Jayendra Udeshi as the independent non-executive director of the company and approved the transfer of all cancelled and lapsed ESOP options of 2010, 2011, 2014 and 2015 including current and future, to ESOP 2021.

For the past three-four months, CarTrade has been in talks with several bankers for its IPO. According to a Moneycontrol report, the company is all set to file its DRHP for Rs 2,000 crore IPO in May this month. Last week, a Mint report said that CitiBank, Nomura, Axis Capital and Kotak Mahindra Capital are advising CarTrade for its IPO.

The decade-old company predominantly focuses on the auction model for old cars, heavy vehicles and farm equipment, and lead generations for new cars. CarTrade had acquired CarWale in 2015 and took a majority stake in Shriram Automall in 2018. CarTrade runs its offline auction business under Shriram Automall whereas the lead generation (meant for OEMs) business is done through CarWale.

Backed by the likes of private equity giants Warburg Pincus, Temasek, JPMorgan and March Capital Partners, CarTrade was close to becoming a unicorn after $25 million in financing from Malabar India Fund and IIFL in April 2021. According to Fintrackr’s calculations, the company was valued at $967 million during the last round.