CarTrade Listing Estimate: Grey market looks confused


Last updated on September 28, 2022

As share allotment of CarTrade IPO has been finalized, all eyes are on listing now. Following disappointing listings earlier this week, investors are both cautious and hopeful that CarTrade IPO will be able to change this. Meanwhile, grey market is giving mixed signals regarding CarTrade IPO listing estimate. Given the opposing sentiments in primary vs secondary markets, listing performance may be quite different from expectations.

According to the latest grey market rates, the scrip is commanding a premium of INR150 per share, meaning that the stock is likely to list around INR1,768 per share. This translates to a potential profit of 9.3% on initial investment. While this is not bad, it needs to be kept in mind that CarTrade listing estimate is based on grey market premiums and could change by the time of listing.

A quick glance at day-wise price movement reveals that premiums have varied a lot ever since trading started in the informal market. In the beginning of the month, the offer attracted premium of as much as INR700 per share, implying an estimated profit of 43%! Subject to Sauda (firm allotment) applications were getting sold for INR4,000 as HNI investors were actively looking for deals. However, a spate of poor listings dampened sentiments in the primary markets. Meanwhile, expensive pricing of the recent public offers did not help the matters either.

Since this a platform stock, performance may be wildly different post-listing. CarTrade sold shares in the PE ratio range of 82.6 – 84.3 which is quite high but it is among few platform companies which are able to show profits (the company earned INR 101.6 crore net profit in FY2021). This factor alone may go in its favor post listing. Something similar was seen in the case of Zomato which is trading with handsome gains over IPO price even as the company’s operations aren’t profitable. This makes CarTrade a dark horse.



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