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Inside CarTrade’s proposed acquisition of CarDekho

Entrackr · 3h ago

Medial

Inside CarTrade’s proposed acquisition of CarDekho CarTrade Tech is in talks to acquire its rival CarDekho, according to a stock exchange filing. If completed, the potential merger could bring two major players in the auto classifieds space under one roof and represent one of India’s largest startup deals this year. “These discussions are limited to the automotive classifieds businesses and do not include financing, insurance, or other non-automotive businesses of theirs,” CarTrade clarified in its filing. The company also noted that “no binding or definitive agreement has been executed so far.” According to media reports, the proposed deal could value CarDekho’s automotive classifieds business at around $1.2 billion. If the acquisition materializes at this valuation, it would be a significant outcome for the Jaipur-based company, which has been under investor pressure to go public. CarDekho, founded nearly 15 years ago, has made multiple attempts to pursue an IPO since 2021 but faced lukewarm response from bankers. CarTrade, on the other hand, has a market capitalization of around Rs 15,000 crore (approximately $1.6 billion), making the structure of any such acquisition particularly interesting to watch. Industry observers view the potential deal as a rare large-scale consolidation in India’s internet ecosystem. CarTrade, with a current market capitalization of about $1.6 billion, is negotiating to acquire a rival nearly its own size. “It’s unusual to see a listed company acquiring a private competitor of comparable scale. If it happens, it could reshape India’s online auto marketplace landscape,” said an analyst tracking the sector. A successful acquisition would further strengthen CarTrade’s position in the auto classifieds as it already owns OLX Auto. In July 2023, CarTrade had acquired OLX India’s auto business in a deal worth Rs 537 crore. While CarDekho is yet to disclose its FY25 numbers, the company’s operating revenue declined 3.5% to Rs 2,250 crore in FY24, with losses narrowing to Rs 340 crore during the same period. CarTrade, on the other hand, has momentum on its side, with its Q2 results recording a 109% year-on-year increase in profit after tax (PAT) for the second quarter of fiscal year 2026. The company's PAT stood at Rs 64.08 crore. It also recorded the highest-ever quarterly revenue of Rs 222.14 crores, a 29% increase from the same period last year. The firm is sitting on a cash balance of Rs 1,080 crore ($122 million), giving it enough leverage to go for a mix of debt and equity in a proposed acquisition. In fact, one could argue that with so much optimism and momentum going its way, CarDekho’s valuation is unlikely to hit the demand, and it will be a long and hard negotiation for CarTrade to close a deal that does not distract it from the road it has finally cleared for itself.