Ola IPO: No Earlier Than FY23 To Make The Most of Electric Vehicle Hype

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Excited by the historic response to Zomato IPO, many other Indian startup unicorns have started gearing up for IPO. And the latest name, many wanted to hear, is ANI Technologies, the company doing business as Ola.

According to few people Dazeinfo spoke to, Ola IPO could be a reality soon, but not before the next financial year. Ola has started putting blocks in place to launch a successful IPO. The people, on the condition of anonymity and without spilling too many beans, said that Ola IPO could be the biggest IPO launch in Indian history beating Zomato IPO, which was the biggest IPO by a tech company to date.

No wonder Ola is not in hurry to float its IPO this year, unlike Paytm, PolicyBazaar or many other startup unicorns which are aiming for big gains by betting on the excitement towards startups in the stock market. The company is expecting the demand for cabs to be back to the pre-covid era with more relief in lockdown. On the other hand, it wants to create enough buzz and traction about Ola Electric in the market, which will help the company to attain a higher valuation during IPO.

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Ola IPO: Big Picture

  • The sources have rejected the possibility of Ola IPO in the ongoing fiscal year. They, however, confirmed that the Indian multinational app-based ride-hailing startup has started the preparation for the IPO that could be floated by mid of next year.
  • The Softbank backed Ola leads the Indian market with 32 million monthly active users on Android. This is much higher than its arch-rival Uber India which reportedly has 22 million users as of June 2021, according to App Annie data.
  • After nearly two years of silence, Ola recently raised $500 million from Temasek and Plum Wood Investment Ltd, an affiliate of private equity fund Warburg Pincus. Interestingly, Ola’s co-founder and CEO, Bhavish Agarwal, also participated in this round in a bid to increase his stake in the company.
  • So far, Ola (ANI Technologies) has raised a total of $4.6 billion from 48 investors.
  • Ola attained the valuation of $6 billion when it raised $300 million from Hyundai and Kia Motors in 2019.
  • After the recent round of $500 million the company’s valuation is expected to soar significantly.
  • The recent investment move was tagged with ‘pre-IPO round’ as the company said that the investment came ahead of IPO. However, it didn’t elaborate anything more on the timeline of Ola IPO then.
  • The Ola IPO will be issued by ANI Technologies, the parent of Ola Cabs, Ola Foods and Ola Financial Services.
  • Ola Electric, a subsidiary of ANI Technologies, has just started taking booking for its first electric scooter which is expected to hit the roads in late August 2021.
  • Ola Electric is expecting to capture a sizeable share of the electric two-vehicle market in India by the end of ongoing FY’22.
  • ANI Technologies is now entering the business of pre-owned car retailing business to compete with other startups, i.e CarDekho and Spinny.
  • Ola has recently awarded stocks worth Rs 400 crore to employees, which eventually created the ESOP Pool of Rs 3,000 crore.

Food For Thought

For Ola, it would be a major milestone to achieve as the company has survived a lot of ups and downs in the last few years. Bhavesh Agarwal who has left no stone unturned to retain control, including the rejection of the $1.1 billion investment offer from its lead investor SoftBank, is now busy overseeing the operations of Ola Electric – an electric vehicle startup that operates as an independent entity. Covid has hit the company badly as a large number of people are still preferring to confined inside their houses as offices remain shut. Ridesharing and Carpooling have become a distant dream now in an era of social distancing and this may have a direct impact on Ola’s revenue book for a longer duration.

All said and done, odds are not favouring Ola much, but we hope that situation may fast become normal. There could be no better time than now for startup unicorns to float their IPO, especially after the overwhelming response received by Zomato and excitement created by Paytm, which is gearing up for the launch of India’s biggest IPO.

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