Cars24's Chief Financial Officer, Shivanshu Makar, announced that the company plans to file a Draft Red Herring Prospectus (DRHP) by April. This will be possible after completing the reverse merger process from Singapore to India, which could take six to nine months.
In an interview with PTI, Makar specified that Cars24 was established in Singapore in 2015 and received approval for the reverse merger. The company intends to file for an Initial Public Offering (IPO) in India. He noted that once the company becomes an Indian entity, it can file the DRHP, followed by another three to four months to obtain approvals from Sebi, determine the price, and complete the book-building process.
Cars24's last funding round took place in 2022 with a post-money valuation of $3.3 billion. Makar emphasized that the company has not raised fresh capital since then, as it did not have an immediate need for additional funds and possesses sufficient capital.
He explained that the goal of the IPO is not to satisfy an immediate financing need but to create a financial reserve for expansion into new territories in India or deepening its presence in the Indian market. Makar pointed to the enormous potential of the market, noting that currently only five out of one hundred Indians own a car, which opens up colossal growth opportunities. The company currently operates in 25 retail cities and plans to expand to 200 cities, which will require about 50,000 vehicles.
When asked about the target valuation for listing, Makar stated that he currently has no specific plans regarding the valuation and does not view the IPO as a final goal or a valuation exercise. For him, the IPO serves as a way to provide liquidity to shareholders and employees while attracting capital to address issues both domestically and internationally.
Furthermore, Makar mentioned that transitioning to a public company status offers benefits in corporate governance. He noted that despite the possibility of raising funds through other channels, the IPO might be chosen for the 'stamp' of governance it provides.
Besides India, Cars24 is exploring expansion opportunities in the Persian Gulf region and Australia. In the UAE, the company holds about 7% of the used car market and is showing nearly 30% growth, while it is already present in three cities in Australia.