Last week, the Indian automotive sector woke up to what might be one of the most significant M&As in the making. CarTrade is said to be in advanced talks to acquire CarDekho, a used car marketplace cofounded by Shark Tank India judge Amit Jain.

Reports indicate that CarTrade, valued at roughly $1.5 Bn, is exploring a potential buyout of CarDekho’s classified business at a valuation of $1.2 Bn to strengthen its consumer business vertical.

However, a key piece of the puzzle, which also has us perplexed, is: why would a fundamentally strong company like CarTrade — whose shares have literally rocketed 167% since last year — even think about buying a loss-making rival at such a hefty valuation? Besides, what makes the acquisition of CarDekho by CarTrade a rare spectacle?

Let’s find the answers to some of these questions and more in today’s edition of The Outline. But before that, let’s talk about…

CarTrade: A House Of Brands

Founded in 2009 by Vinay Sanghi after a nine-year stint as the CEO of Mahindra First Choice, the company began as a B2B and C2B auction platform. Banks, fleets, and dealerships relied on CarTrade’s auctions and verification services, paying commissions for each transaction.

Remarketing remains central to its economics even today.

The pivot to used car classifieds came in 2012, with the launch of CarTrade.com and CarTradeExchange.com. But the real inflexion point arrived in 2015, when CarTrade removed a major competitor by acquiring Automotive Exchange Private Limited, the parent of CarWale and BikeWale, for $100 Mn.

The deal immediately expanded its consumer........

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