CarTrade Tech is set to acquire online market place OLX India’s auto sales business for Rs 537crore.
Mumbai-based car platform CarTrade announced that it will acquire 100 per cent stake in Sobek Auto India Pvt Ltd in a stock exchange on Monday the entity which houses OLX India’s automotive Business for a cash consideration. Even though it is a profitable move, the acquisition could significantly impact CarTrade’s cash cushion.
The company which had raised funds from investors such as Temasek Holdings and Tiger Global prior to its public offering in 2021 had Rs 1,185 crore cash and cash equivalents on its books on a standalone basis.
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OLX is a classified unit of Dutch-listed investment firm Prosus. Earlier this year, Prosus had said that it was divesting OLX’s automotive business globally on account of weak macroeconomic conditions and rising challenges for the segment. Reportedly, Prosus had earlier engaged in discussions with several other players in the used car segment, including Cars24 and Spinny, prior to closing the deal with Cars24.
“The acquisition is in furtherance of the strategic objectives of the company to undertake investments which provide synergistic benefits to the existing businesses of the CarTrade Tech,” the company said in the stock exchange filing.
In its earnings statement released last month, Prosus had said, “Ecommerce consolidated trading losses (or operating losses) from continuing operations of $617 million reflected incremental investment in the group’s ecommerce growth extensions as we continued to invest in high-conviction growth areas. Market conditions deteriorated significantly for this business in the second half of the year and the group is completing an exit of OLX Autos”.
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