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CarTrade Tech shares recover as pre-IPO period ends

Shares of CarTrade Tech remained steady on Monday after coming under pressure in early trade as the one-year lock-in period for its pre-IPO holding ended. The lock-in period is applicable to companies that do not have promoters and for those who bought shares before the IPO. About 2.6 crore shares were with pre-IPO investors as on Monday.

CarTrade Tech opened lower on Monday, hitting an intra-day low of Rs 595 on the BSE. However, it pared early losses to close higher by 0.7% at Rs 637. This was on a day the benchmark Sensex tanked 1.5%.

The shares were listed on the bourses on August 20, 2021 with a minor discount. The stock lost 59% in the past year and more than 5.3% in the last one month.

The company has no promoter holding. Foreign portfolio investors held 19.5% in the fund, mutual funds have 3.3%, high net worth individuals 4.8% and retail investors 14.4% as of June 30, 2022, according to available data.

Experts believe the stock could see some more selling pressure as the patience of individual investors, including HNIs and millennials, in the company, wears thin.

The owner of platforms such as CarWale, CarTrade and BikeWale had a dozen of brokerages recommending ‘subscribe’ to the company’s IPO last year, with some seeing it as a medium- to long-term investment.

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“CarTrade operates on an asset-light business model and is well placed in the automotive value chain with a combination of online and offline services. Their investments in technology have made their platforms scalable in a highly capital-efficient manner. The company plans to grow by investing in technology, increasing online-offline presence and adopting a vehicle-agnostic approach. We have a positive view on the company given its strong brands, technology-driven platforms and long-standing relationships with customers, dealers and other stakeholders,” said a IPO product note by Religare last year.

Notably, shares of Zomato had tanked over 14% to a new all-time low last month as the lock-in period for its pre-IPO stock ended.