Carma shares slide on ASX debut following $100m IPO
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The news: Digital used car dealership Carma has seen its share price slide on its trading debut following the completion of an oversubscribed $100 million initial public offering (IPO).
The numbers: At 12:20pm AEDT, shares in Carma had fallen 7.4% to $2.50.
The company issued nearly 26 million shares at $2.70 each to raise $70 million. The remaining $30 million was raised by selling more than 11.1 million shares that were held by Carma SaleCo at the same offer price.
At the offer price, the company would have had a market cap of around $370 million.
The context: Founded in 2021, Carma’s platform facilitates sourcing, inspection, reconditioning, pricing, online retail, wholesale auctions, financing and delivery.
The company intends to use the $70 million secured through the primary raise to deliver on its growth strategy. This includes boosting consumer purchasing through ‘Sell-to Carma’, scaling reconditioning operations and boosting car inventory.
The Australian used car market is worth around $118 billion with more than 3.5 million used cars sold annually.
What they said: “Today marks a pivotal milestone for Carma. This IPO will help provide the capital needed to fundamentally transform the pre-owned car experience for Australians, where buyers can find and purchase a high quality vehicle without ever leaving their home, and sellers get a seamless experience at a fair price,” Carma chair and former REA Group CEO Owen Wilson said.
“I believe Carma is uniquely positioned to lead the digital transformation of the Australian automotive retail industry, and we look forward to welcoming future investors on this journey.”
The sources: Carma media release, ASX
