#CarDekho's Amit Jain talks about used car retail business and their future plan for an #IPO.
Watch him in conversation with Rishabh Bhatnagar.
For the latest news and updates, visit: ndtvprofit.com
Watch him in conversation with Rishabh Bhatnagar.
For the latest news and updates, visit: ndtvprofit.com
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TVTranscript
00:00 We exited because of United Economics. I did not see a large profit pool getting created
00:04 unless the GMV of the vehicle actually becomes twice of what it is today. Then it can have
00:11 some profits out there. But at the average ticket size of auctions which we were doing
00:15 or retail we were doing was around 5-6 lakh rupee a vehicle. It needs to go to around
00:19 12-15 lakh. It is still a matter of time, maybe a decade out, maybe seven years out.
00:24 When that happens, we will re-enter maybe at that point. But we did evaluate it from
00:29 all dimensions. I did not find it viable. I won't comment on the competition and why
00:33 they are pursuing it. But obviously there has to be a purpose there also.
00:38 Amit, you are an IPO bound company. What is your metric for gauging when CarDekho Group
00:45 is ready for an IPO? Is it a certain level of revenue that you are looking at or are
00:50 you looking at say back to back quarters of profitability? How do you gauge when a company
00:54 is ready for an IPO?
00:55 There is a lot of learning from other tech companies which have gone public. So I think
01:00 what we have picked is a leap from their playbook only on what worked, what did not work. So
01:04 what I realized is taking a company out which is profitable is a good idea and having a
01:09 trailing track record. Not like that I become profitable this quarter, I go public. I want
01:13 to have at least four quarters to six quarters of track record of profitability. That's one.
01:19 Number two is go out with a story which is not unviable or unbelievable. Let's say I'm
01:25 making one rupee profit and I'm claiming I'll make 100 in the next five years. If you want
01:30 to make 100, go at 20. So that's the way I look at the problem statement. So make the
01:36 story more believable with trajectory and track records and that will make the people
01:41 who are investing in the stock more believable. Go at the right valuation, don't overprice
01:45 the IPO. So that's the plan and depending on the macro obviously time it right.
01:50 [Music]