Ride-hailing company Ola Cabs is planning to launch an initial public offering (IPO) to raise $500 million (over Rs 4,150 crore) at a company valuation of about $5 billion, Reuters has reported.
Ola, backed by SoftBank, plans to file papers for approval with the Securities and Exchange Board of India (Sebi) within three months, according to the Reuters report citing three sources with direct knowledge of the matter.
The company is in talks with investment banks, including Goldman Sachs, Bank of America, Citi and India’s Kotak and Axis, and plans to appoint IPO advisers within a month, said the Reuters report citing two of the sources.
Ola’s Second Attempt At IPO
This is Ola’s second attempt at an IPO, after a 2021 plan to raise up to $1 billion was canned. Ola was valued at $7.3 billion at the close of 2021 and at $5.7 billion in a private funding round in January 2019.
In May last year, US-based investment management company Vanguard slashed Ola’s valuation by 35 per cent amid global macroeconomic conditions, reducing its worth to about $4.8 billion.
In January, Ola laid off 200 employees from its Ola Cabs, Ola Electric, and Ola Financial Services verticals as part of the “restructuring” exercise.
Vanguard, an Ola shareholder cut its internal valuation of Ola to $1.9 billion in February this year.
Its other investors include Warburg Pincus, Temasek and Tiger Global Management.
Ola Cabs
Ola was founded by Bhavish Aggarwal, who is one of the country’s best known startup entrepreneurs. Drawing comparisons to Tesla boss Elon Musk, he also runs a separate electric scooter maker- Ola Electric, which is India’s biggest.
Ola Electric is planning an IPO as well, and filed papers for regulatory approval last December, Reuters reported.
The cabs business has looked to cut losses and streamline operations in recent months. Its losses more than halved in the fiscal year ending 2023, while last week Ola said it is shutting down its international businesses- comprising UK, Australia and New Zealand.
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