Shriram Transport Finance Co. Ltd. (STFC), Shriram Automall and CarTrade have entered into a definitive transaction that will result in the combination of the two auction businesses creating India’s leading used vehicle platform.
CarTrade, India’s leading online automotive business, will acquire 51% in Shriram Automall India Ltd. (SAMIL), India’s No.1 physical auction platform for pre-owned vehicles from STFC. CarTrade will also outsource its 100% auction business to SAMIL and sells its equity to SAMIL in Adroit Inspection Services Pvt. Ltd., which offers services like valuation & inspection to insurance and banks & NBFC industry. Through this combination Shriram Automall is set to become an outright entity that offers both physical and online auction platforms to its customers in an unprecedented manner. With this partnership SAMIL expects business to double in the next three years.
Transaction terms
Under this arrangement, India’s leading automotive platform CarTrade gets 51% equity stake by paying Rs. 156.37 crores to STFC as consideration in Shriram Automall. STFC will continue to hold 41% of the existing equity. The balance equity will be used to provide ESOP and shares to its existing and new employees. Further SAMIL will acquire 100% equity in Adroit Inspection Services Pvt. Ltd. from CarTrade by paying Rs. 13 crores as consideration. In the joint entity, Mr. Sameer Malhotra, the current wholetime Director and CEO of Shriram Automall, will continue to hold his position.
Said Mr. Umesh G. Revankar, MD, Shriram Transport Finance Ltd. (STFC): “We’re very happy to announce that CarTrade Exchange is becoming our strategic partner. This proposition will not only create an enhanced market place for transaction of pre-owned vehicles & equipment but also add value proposition to business via technology & digital expertise. Together this will also open avenues for us to enter new segments of vehicle finance and we’re confident to go further and serve our customer with better solutions & services.”
Mr. Vinay Sanghi, Founder and CEO, CarTrade, said: “We were looking for a player with physical presence all around the country to support our online marketplace. Shriram Automall is the only player available in the country with a unique physical bidding concept and a leader like Sameer who has unparallel knowledge of both physical and online auction. We’re happy to come together with STFC and SAMIL to provide holistic solutions to our customers.”
Sharing views over the merger, Mr. Sameer Malhotra observed: “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 the 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. This partnership will result in an immense increase in business transactions. We’re having years of expertise in the commercial vehicle segment. With this partnership we will be aiming to create new and unique value propositions in the passenger vehicle market as well.”