CarTrade jumps ~15% on acquisition of OLX India’s auto business for Rs 537 crore

11 Jul 2023 , 02:38 PM

Cartrade Tech informed that it will acquire the auto sales business of online marketplace OLX India for a consideration of Rs 537 crore.

Following this development, company’s counter surged to an intraday high of Rs 584.80 on NSE.

At around 2.28 PM, Cartrade Tech was trading 15.31% higher at Rs 561.95, against the previous close of Rs 487.35.

CarTrade announced in a stock exchange filing on Monday that it will acquire a 100% stake in Sobek Auto India Pvt Ltd, the entity that houses OLX India’s automotive business, for a cash consideration. Despite the fact that it is profitable, CarTrade believes that the acquisition may have a significant impact on its cash cushion.

‘The acquisition is in support of the company’s strategic objectives to make investments that provide synergistic advantages to the CarTrade Tech’s existing businesses,’ stated the company in its stock exchange filing.

Prosus, a Dutch-listed investment firm, operates OLX. Prosus announced earlier this year that it was divesting OLX’s automotive business globally due to weak macroeconomic conditions and rising challenges in the segment.

On a standalone basis, the company reported cash and cash equivalents of Rs 1,185 crore as of March 31, 2023, having raised funds from investors such as Temasek Holdings and Tiger Global before its public offering in 2021.

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