India: CarTrade acquires majority stake in Shriram Automall for $24.5m

January 24, 2018

Online automobile classified platform CarTrade, operated by MXC Solution Private Ltd, is acquiring a majority stake in Shriram Automall India Ltd (SAMIL) for nearly $24.5 million to create India’s largest used vehicle platform.

CarTrade will acquire shares in SAMIL from Shriram Transport Finance Company Limited (STFC), the latter said in a BSE filing on Wednesday.

Besides, CarTrade will also outsource its 100 per cent auction business to SAMIL and sell its equity to SAMIL in Adroit Inspection Services Pvt. Ltd., which offers services like valuation and inspections to insurance companies, banks and NBFCs, for Rs 13 crore, the filing said.

In the joined entity, Sameer Malhotra, current whole time Director and CEO of SAMIL, will continue to hold his position.

Vinay Sanghi, Founder and CEO of CarTrade, said, “We were looking for a player with physical presence all around the country to support our online marketplace. SAMIL is the only player available in country with unique physical bidding concept and a leader like Sameer who has unparallel knowledge of both Physical and Online auction.”

SAMIL offers various well organized and transparent bidding platforms, including physical, online, onestop classified and negotiated deals, for acquisition and disposal of pre-owned commercial vehicles, construction & industrial equipment, tractors & agricultural equipment, passenger vehicles, three wheelers and two wheelers. It enjoys a presence across the country with 73 Automalls and 150+ bidding locations.

Through this partnership, SAMIL is set to become an outright entity that offers both physical and online auction platforms to its customers in an unprecedented manner, the filing said. It also expects its business to double in the next three years.

“We’re growing exponentially at 30% year on year basis and were looking for more innovative thought partners to grow multi-fold at over 50% in coming years. We have around 5 million customers support at shriram group; joining hands with CarTrade Exchange will add another 5 million digital customer base, besides their technology expertise,” said Sameer Malhotra, Director and CEO of SAMIL.

“This partnership will result in an immense increase in business transactions. We’re having years of expertise into commercial vehicle segment, with this partnership will be aiming to create new and unique value propositions in passenger vehicle market as well,” he added.

Established in 2010 by Vinay Sanghi and Rajan Mehra, CarTrade provides buyers and sellers a structured platform for buying and selling new and used vehicles. The firm had acquired its rival CarWale in late 2015 for $90 million. It counts Warburg Pincus, Temasek, JP Morgan and March Capital among its key investors.

STFC is the flagship company of the Shriram group which has significant presence in consumer finance, life insurance, general insurance, stock broking and distribution businesses.

ZBA (Zarir Bharucha & Associates) and Wadia Ghandy & Co were the legal advisors to the transaction and Dhruva Advisors LLP actedas the transaction advisors.