Shares of Cartrade Tech, a multi-channel auto platform provider, skyrocketed nearly 17% during Tuesday's trade, reaching an 8-month high. This strong rally in the stock came after the company on Monday said it entered into a share purchase agreement with Sobek Auto India Private Limited and its holding company OLX India B.V. for the acquisition of a 100% stake in Sobek from OLX India B.V.
Sobek operates an automotive digital platform and a classifieds internet business. In the financial year FY20, FY21, and FY22, Sobek reported turnover of ₹556.42 crore, ₹592.2 crore, and ₹1,110.40 crore, respectively, as stated in the company's exchange filing.
The acquisition of Sobek will be for a consideration of ₹537.43 crore to be paid on the completion date of the acquisition, the company said.
Cartrade Tech views this acquisition as a strategic move that aligns with its overall objectives and aims to generate synergistic benefits for its existing businesses.
In response to this positive development, Cartrade Tech shares opened with a significant gap-up of 9.18% at ₹532 and continued to climb, reaching an intraday high of ₹569.15 apiece in early trade. This marked a stellar gain of 16.78%, representing the second-largest intraday surge since the stock's listing.
Previously, on June 05, 2023, the stock experienced a significant surge of approximately 17.55%, resulting in the highest intraday gain. Similarly, on June 08, 2023, the stock recorded a gain of 14%, showcasing another strong intraday performance.
CarTrade Tech operates an automotive digital ecosystem that connects automobile customers with automotive manufacturers ("OEMs"), dealers, banks, insurance companies, and other stakeholders.
The company owns and operates under several brands, such as CarTrade, CarWale, and AutoBiz. Through these platforms, the company enables new and used automobile customers, vehicle dealerships, OEMs, and other businesses to buy and sell their vehicles simply and efficiently.
The company's shares have been performing well on Dalal Street for some time. In June, the shares gained 15.71%, and in the current month so far, they are up by nearly 16%. However, the stock is still down by around 65% from its IPO price of ₹1,618 per share.
CarTrade Tech made its debut on the stock exchanges on August 20, 2021, raising ₹2,998 crore through a complete offer for sale. Notably, it has never traded above its IPO price since its market debut.
In terms of financials, for the fiscal year 2022–23, the company achieved a net profit of ₹40 crore, marking a substantial turnaround from the net loss of ₹121 crore in the previous fiscal year. The total revenue for FY23 stood at ₹364 crore, an increase from ₹313 crore.
06 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.