Ola Cabs Eyes $500 Mn IPO Post Ola Electric Success: Bhavish Aggarwal’s Move

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Three points you will get to know in this article:

  • Ola Cabs to file IPO papers with SEBI in three months.
  • Ola Cabs began IPO prep after Ola Electric filed DRHP in December.
  • Ride-hailing major in talks with investment banks for IPO.

Ola Cabs' IPO Revival

After postponing its original plans to go public in 2021, the well-known ride-hailing service Ola Cabs is now gearing up again for its big debut on the stock market. Competing with Uber, Ola aims to gather $500 million through its IPO, with an estimated value of around $5 billion. According to a report from Reuters, Ola Cabs intends to submit its draft IPO documents to the Securities and Exchange Board of India (SEBI) for approval within the next three months. The groundwork for Ola Cabs’ IPO picked up steam right after Bhavish Aggarwal’s electric vehicle (EV) venture, Ola Electric, took the step of filing its DRHP in December of last year. The EV company is eyeing its own entry into the market later this year.

Ola Cabs' IPO Discussions

According to sources, Ola Cabs is currently engaged in discussions with several investment banks, such as Bank of America, Goldman Sachs, Citi, Kotak, and Axis, regarding its upcoming IPO. The company is reportedly planning to appoint IPO advisers within the next month.

In early 2021, Ola had ambitious plans to raise around $1 billion through its IPO. Discussions were underway with investment banks to finalize the IPO; however, it was later postponed.

Market Conditions and IPO Activity

It’s worth noting that following the tech IPO frenzy of 2021, a significant downturn in the stock market led many startups to delay or scrap their IPOs in 2022. While IPO activity regained momentum in the latter part of 2023, there’s anticipation for a resurgence reminiscent of 2021 this year. Companies like OYO, Swiggy, Ola Electric, and MobiKwik are expected to join the public market fray.

In August 2022, ANI Technologies, the parent company of Ola Cabs, secured approximately $20 million from Axis Growth and Arrow Capital in the latest funding round, Series J, valuing the company at around $6.7 billion.

Ola Cabs recently withdrew from several international markets, such as the UK, New Zealand, and Australia, to concentrate on its expanding operations within India.

Ola Cabs' Financial Performance

Ola Cabs recently announced that its India mobility business achieved break-even with a ‘segment-adjusted’ EBITDA of approximately INR 250 Cr in FY23, compared to an EBITDA loss of INR 66 Cr in the previous year. The revenue of its India mobility arm increased by 58% year-on-year to INR 2,135 Cr in FY23, as reported by the company.

Ola Cabs has received support from major investors such as SoftBank, Vanguard, Warburg Pincus, Temasek, and Tiger Global Management. Vanguard recently reduced the valuation of its investment in Ola by 29% to $1.88 billion.

In preparation for its IPO debut, Ola Cabs revisits its plans after a 2021 postponement, targeting 500 million with a 5 billion valuation. Discussions with top investment banks like Bank of America and Goldman Sachs are underway. The company aims to appoint IPO advisers soon. The broader market anticipates a resurgence in IPO activity after 2023. Ola Cabs celebrates its India mobility business breaking even in FY23, with improved revenue. Major investors like SoftBank and Vanguard support Ola, with recent valuation adjustments.

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