Cartrade buys OLX Autos. Later clarifies it’s the entire Olx India business.

Cartrade said that it will acquire 100% stake in Sobek Auto India Pvt Ltd, the entity that houses OLX India’s automotive business.

  • It’s an all cash deal
  • Cartrade is paying Rs 537.43 crore for the transaction
  • Olx Auto financials
    • Revenues:
      • FY 22 – Rs 1,110 cr
      • FY 21 – Rs 592 cr
      • FY 20 – Rs 556 cr
    • Profits – not disclosed but it must be loss making
  • The acquisition will likely to be completed in 21-30 days.

Rationale for the transaction

For Olx Auto promoters – the strategy to exit from non viable operations has been clearly communicated by them.

Prosus, the global investment group is the parent of Olx. It had made the “strategic decision” in March this year to exit the Olx Autos business in several countries. In June, the company had said it was exploring buyers for its Olx classifieds platforms and auto transaction businesses in India. It had also ceased operations in Argentina, Mexico, and Colombia, resulting in the global layoff of 800 employees.

For Cartrade – synergy to the existing business. Practically how much of this works out remains to be business.

Olx Auto kind of second hand car business especially if it’s inventory driven is difficult to manage at scale.

Another important point that should be noted by the investors – Cartrade had around Rs 1,100 cr of liquidity as at March 2023 end. This was generating non operating income for the Company and was helping it report profits. In FY 23, this income was around Rs 56 cr. Cartrade’s total PBT was lower at Rs 46 cr implying loss making core operations.

With this transaction, 50% of that liquidity is gone.

Companies -
Subscribe
Notify of
guest
1 Comment
Inline Feedbacks
View all comments
1
0
Would love your thoughts, please comment.x