In a significant move within India’s used cars industry, CarTrade has successfully acquired a 100% stake in Sobek Auto India Private Limited, which encompasses the OLX classifieds platform and OLX Autos C2B transaction businesses. The deal, announced a month ago, marks the culmination of an extensive process involving Prosus, the owner of a 99% stake in OLX, engaging with multiple parties for the sale of its India operations.
Strengthening CarTrade Portfolio and Market Reach
Vinay Sanghi, the chairman and founder of CarTrade Group, stated that the acquisition of OLX Classifieds and OLX Auto in India will provide customers with a diversified classifieds portfolio and simplify used vehicle transactions. This strategic acquisition adds approximately 68 million average monthly unique visitors and 32 million listings annually to CarTrade’s platform. As a result, it significantly contributes to the company’s growth and expansion.
OLX India’s Impact on CarTrade
The acquisition boosts CarTrade’s employee count over 4,000. It positions the company as a key player in the used cars marketplace. CarTrade emerged victorious in the race against competitors Spinny and Cars24 to secure the acquisition of OLX India.
Financial Insights from the Acquisition
CarTrade revealed that OLX India records over 35,000 completed sales each year and operates across approximately 12 categories. As of July 2023, OLX India reported a pre-PDT profit of INR 23 crore. The auto business is debt-free and holds a cash reserve of INR 100 crore. The classifieds segment reported a pre-PDT annualized profit of INR 111 crore.
Future Prospects and Industry Landscape
Looking ahead, CarTrade aims to reduce losses in the C2B transaction business and enhance unit economics. The integration of OLX India’s auto dealer network is expected to amplify CarTrade’s existing capabilities in areas such as inspection, auction, customer support, and value-added services. CarTrade competes with established players like Cars24, Spinny, CarDekho, and Droom in India’s competitive used car marketplace. In the fiscal year 2022-23, CarTrade reported a net profit of INR 40.43 crore, a significant improvement from the INR 121.35 crore loss in the previous fiscal year. As of Monday, the company’s market capitalization stood at INR 2,437.80 crore.
