CarTrade Empowers Expansion with Rs 537 Cr Acquisition of OLX Autos’ India Biz
CarTrade Tech Limited, an automobile classifieds portal, has announced its acquisition of OLX India’s auto business for a deal valued at Rs 537 crore. The share purchase agreement was made between CarTrade and Sobek Auto India Private Limited, along with OLX India B.V., the parent company of Sobek. The acquisition is expected to provide CarTrade with strategic advantages and strengthen its position in the Indian automotive market.
With this acquisition, CarTrade aims to expand its presence in the online classifieds space and enhance its offerings to customers. The deal brings together the expertise and resources of both companies, allowing for the development of innovative solutions and improved services for users. The transaction marks a significant move in the automotive sector and reflects the evolving landscape of online car sales and classifieds in India.
CarTrade Tech Limited, a prominent player in the Indian automotive industry, has reached an agreement to acquire Sobek Auto India Private Limited (Sobek) from OLX India. The deal, valued at Rs 537.43 crore, will be a cash transaction. CarTrade will purchase the entire 100% stake of Sobek, following Sobek’s recent acquisition of the classifieds internet business from OLX India.
The acquisition is expected to be completed within 30 days and is subject to customary closing conditions. This strategic move will enable CarTrade to strengthen its market position and expand its offerings in the auto sector. With the acquisition of Sobek, CarTrade aims to further enhance its presence in the online auto classifieds segment, leveraging the expertise and resources of both companies to drive growth and provide enhanced services to customers in India’s automotive market.
In March of this year, OLX made the strategic decision to exit OLX Autos’ business in multiple countries. As part of this restructuring, the company explored potential consolidation opportunities within the automotive space. After considering various options, OLX settled on the acquisition deal with CarTrade for its auto business in India. However, this decision also led to job cuts globally, with more than 800 staff members being let go, including several hundred employees in India.
The move to exit the auto business and streamline operations reflects OLX’s focus on optimizing its operations and aligning its resources with core areas of business. While this restructuring resulted in job losses, it also presents an opportunity for CarTrade to further strengthen its position in the Indian automotive market and capitalize on the growth potential in the online auto classifieds segment.
The acquisition of OLX India’s auto business by CarTrade aligns with the company’s growth strategy and presents an opportunity for CarTrade to enhance its market position. CarTrade has faced challenges since its public listing on the NSE in August 2021, experiencing a decline in its share price from the initial listing price of nearly Rs 1,600 per share to around Rs 486 per share.
The current market capitalization of CarTrade stands at approximately Rs 2,280 crore or $278 million. The acquisition of OLX India’s auto business could potentially contribute to the growth and value of CarTrade, as it expands its offerings and strengthens its presence in the Indian automotive market. This move may help CarTrade in its efforts to navigate the challenges it has faced since its public debut and drive future growth in the industry.
CarTrade’s acquisition of Sobek, the parent company of OLX India’s auto business, is in line with the company’s strategic objectives of seeking investments that offer synergistic benefits to its existing operations. By incorporating Sobek’s business into its portfolio, CarTrade aims to strengthen its position in the automotive sector and expand its range of services.
Although specific financial data for Sobek in FY23 is not available, it is worth noting that in FY22, the company recorded impressive growth in gross revenue (GMV). It achieved an 87.5% increase in gross revenue, amounting to Rs 1,110.4 crore, compared to Rs 592.3 crore in FY21. This growth highlights the potential value and market presence that Sobek brings to CarTrade through the acquisition.
By leveraging the synergies between CarTrade and Sobek’s business, CarTrade aims to enhance its growth trajectory and consolidate its position as a leading player in the Indian auto industry. The acquisition aligns with CarTrade’s long-term strategy of capitalizing on strategic investments to drive expansion and unlock new opportunities in the market.
