Cars24 Targets April DRHP Filing as Used-Car Platform Prepares Reverse Flip to India

Gurugram-based pre-owned vehicle e-commerce marketplace Cars24 is gearing up to submit its draft red herring prospectus (DRHP) for a domestic initial public offering (IPO) by April, Chief Financial Officer Shivanshu Makkar confirmed. The regulatory filing will follow the completion of the company's reverse flip, which involves shifting its corporate domicile from Singapore back to India.

Reverse Domiciling and Public Market Timeline

Cars24 was incorporated in Singapore in 2015. The company has secured approval from Singaporean authorities for the relocation and is currently processing filings in India. The entire reverse-flip procedure is expected to take six to nine months.

Once Cars24 is formally established as an Indian corporate entity, it will be eligible to file its DRHP with the Securities and Exchange Board of India (SEBI).

"By April, we would be eligible to file a DRHP. From there, it takes about three to four months for Sebi approvals, pricing, book-building and all. So, that's the kind of timeline I'm looking at right now," Makkar said.

Valuation and War Chest Allocation

Cars24 reached a post-money valuation of $3.3 billion during its last external funding round in 2022. The company has not raised additional private equity or venture funding since then, having operated without requiring supplementary cash infusions.

The primary proceeds generated from the proposed public issue will be deployed directly toward market expansion rather than servicing legacy obligations.

Key focus areas for the deployment of primary IPO proceeds include:

• Retail Footprint Growth: Scaling physical retail presence from the current 25 cities to approximately 200 cities across India.
• Inventory Scaling: Expanding vehicle supply and retail holding capacity to manage around 50,000 cars.
• Market Penetration: Addressing the massive headroom in the Indian passenger vehicle market, where car ownership currently stands at five out of 100 citizens.

Trend of Reverse Flips in Indian Capital Markets

Cars24's decision to shift its parent entity back home mirrors similar moves by consumer tech companies, including Flipkart and PhonePe, as they align corporate structures for listing on Indian bourses. With domestic public markets demonstrating strong appetite for profitable and scalable tech businesses, the move positions Cars24 to tap into India's expanding organized pre-owned vehicle ecosystem.

Tags: Cars24 SEBI Automobiles IPO Used Car Market Startups