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A new ride: Ola Cabs weighs $500 million IPO, in talks with i-banks

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 two of the sources

Ola, Cab, Ola cab

Ola Electric is planning an IPO as well, and filed papers for regulatory approval last December, Reuters reported. Photo: Shutterstock

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Ride-hailing firm Ola Cabs is planning an initial public offering (IPO) to raise $500 million at a company valuation of about $5 billion, three sources with direct knowledge of the matter told Reuters on Friday.

SoftBank-backed Ola  plans to file papers for approval with the country's market regulator within three months, said the sources, who declined to be named as the matter is confidential.

Ola declined to comment.

The company is in talks with investment banks, including Goldman Sachs, Bank of America, Citi, Kotak and Axis, and plans to appoint IPO advisers within a month, said two of the sources.
 

Citi and Bank of America declined to comment, while the others did not respond to requests for comment. This is Ola’s second attempt at an IPO, after a 2021 plan to raise up to $1 billion was canned.

The development comes on the back of sister firm Ola Electric filing its draft red herring prospectus with market regulator Sebi in December to raise around Rs 7,250 crores via an IPO, the first attempt at a public listing by an Indian electric vehicle (EV) firm.

Recently, Ola Electric became the first Indian two-wheeler company to receive a domestic value addition (DVA) certificate under the production-linked incentive (PLI) scheme for the automobile and auto component industry. The aim is to book a 13 per cent subsidy on the sales value.

Ola Electric has recently announced a series of initiatives spanning products, services, charging networks, and battery warranties. With the launch of S1 X (4kWh), it expanded its portfolio to six products, catering to customers with different range requirements.

The company also launched the industry's first 8-year/80,000 km extended battery warranty for the entire range of products at no extra cost. Other than Ola, Ather Energy, which makes electric scooters, was also hiring investment bankers to help it with its IPO this year, according to people familiar with the matter. The Bengaluru-based firm is planning to raise an estimated $400 million (Rs 3,300 crore) through the IPO.

The company is targeting a valuation of about $2 billion, according to sources.

Ola was valued at $7 billion in a 2021 fundraising, but its investors have slashed its valuation since in internal calculations. Vanguard, an Ola shareholder cut its internal valuation of Ola to $1.9 billion in February, according to a filing seen by Reuters.

Its other investors include Warburg Pincus, Temasek and Tiger Global Management.

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. 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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First Published: Apr 19 2024 | 8:24 PM IST

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