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Update: MIH Group Acquires Majority Stake In Gaadi.com

Updated below:

MIH Group (Naspers), promoters of the social networking site Ibibo, have acquired a majority stake in Gaadi.com, the auto classifieds website owned by Accentium Web*. Umang Kumar, co-founder of Gaadi.com, is taking over as its CEO. The rationale for MIH is the addition of an auto classifieds site in India to its portfolio. The company already owns sites like ‘otomoto.pl’ in Poland and ‘auto.mail.ru’ in Russia.

The stake has been acquired by an MIH owned entity (and not Ibibo), Nikita Dhingra, M&A-Head for MIH Internet (India) told MediaNama. MediaNama, following an anonymous tip-off on Feb 1st, had contacted Ibibo CEO Ashish Kashyap for a confirmation or denial of whether Ibibo was acquiring Gaadi.com. Kashyap had denied the acquisition then; given that it is MIH India that has acquired stake, technically, he was right.

Dhingra declined to name that entity, the percentage of the stake acquired by it, and the amount the company intends to invest in the business. She and Vivek Pahwa* declined to comment on the presence of an earn-out clause or a lock-in period for the promoters of Gaadi.com, though she confirmed that a minority shareholder, Suresh Kanumuri, has exited the venture. Pahwa will continue to remain involved in Gaadi.com at a strategic level, but refused to comment on anything beyond what is in the press release. This is his second exit to a media conglomerate: in 2007, HT Media had bought DesiMartini.com from him.

According to filings with India’s Registrar of Companies, Gaadi Web Pvt Ltd reported a profit before tax of Rs. 2.69 lakh on an income of Rs. 73.25 lakh, in 2009-10 compared with an income of Rs. 18.69 lakh  and a loss of Rs. 69.47 lakh during 2008-09. (Update: We just received a message from Vivek Pahwa saying that current year revenues are over 4 times last year’s revenues)

This is the third recent acquisition of an auto portal: last year, German media company Axel Springer and the India Today Group together acquired a 70.4% majority stake in auto classifieds business Carwale.com. In 2009, MotorExchange had acquired B2C auto portal CarTrade India.

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(With inputs from Nikhil Pahwa)

* Accentium Web has been founded by Vivek Pahwa, who is MediaNama Editor Nikhil Pahwa’s cousin.

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