When a company prepares for its initial public offering (IPO), it typically undergoes various transformations, often including cost-cutting measures to improve its bottom line. In a similar vein, Ola Cabs, a prominent ride-hailing company, is preparing for its IPO this year, with two of its top executives resigning over the past two months.
Karthik Gupta, who served as the Chief Financial Officer (CFO) of ANI Technologies, Ola Cabs’ parent company, has stepped down just two weeks after the departure of CEO Hemant Bakshi.
According to an Ola spokesperson, the departures of top leaders and other layoffs are part of an ongoing restructuring effort aimed at enhancing productivity in an era dominated by AI, which is reshaping the global cab-hailing industry. This restructuring is intended to bolster Ola’s cost structures, drive growth, and ultimately improve its financial performance.
Karthik Gupta joined Ola Cabs only seven months ago, in November 2023, and was responsible for financial strategy, revenue growth, cost optimization, vendor negotiations, tax and treasury management, and investor relations, according to his LinkedIn profile. Meanwhile, CEO Hemant Bakshi left Ola Cabs just four months after joining the company.
As Ola Cabs gears up for its IPO, the company is amidst a restructuring phase that is anticipated to result in the layoffs of nearly 20% or approximately 250 employees.
“We have made substantial investments in the areas of AI & Technology which has led to significant cost advantages…certain roles within the company will get redundant,” wrote Bhavish Aggarwal, co-founder and managing director of Ola Cabs in an internal email on April 29, 2024.
Ola Brought Back Ankush Aggarwal
Amidst the layoffs at Ola Cabs, the company has seen the return of Ankush Aggarwal, the brother of co-founder Bhavish Aggarwal, to its executive leadership team. Previously serving as the Chief Business Officer (CBO) at Ola Electric, Ankush is expected to assume multiple responsibilities within Ola Cabs, similar to his role at the electric vehicle company. Additionally, he is set to assume the role of Chief Executive Officer (CEO) at Ola Financial Services.
It’s important to note that Ola Cabs and Ola Financial Services are part of ANI Technologies, while Ola Electric Mobility operates as a separate entity founded by Bhavish Aggarwal.
Ola IPO Preparations and Financial Performance
Ola Cabs recently initiated preliminary discussions with investment banks for its IPO. Concurrently, its sister company, Ola Electric, filed its draft red herring prospectus (DRHP) with the market regulator SEBI in December 2023. This move aims to raise approximately Rs 7,250 crores through an IPO, marking the pioneering effort of an Indian electric vehicle firm in this domain.
ANI Technologies, the parent entity of Ola Fleet, Ola Financial Services, Ola Cabs, and Ola Stores, reported a consolidated revenue of Rs 2,799 crore in FY23, with an impressive 42% YoY growth. However, it’s worth noting that revenue declined in the Ola Fleet and Ola Financial Service segments during this period.
Interestingly, the revenue of Ola’s India Mobility business increased by 58% YoY to Rs 2,135 crore. During the period, the company also achieved positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 250 crore, a significant turnaround from the Rs 66 crore loss reported in the previous fiscal year.
In response to rising competition, government initiatives promoting fleet electrification, and a strategic focus on the Indian market, Ola Cabs recently ceased its international operations in select countries.
As the company is leaving no stone unturned to ensure Ola Cabs IPO emerges as a resounding triumph. The road ahead may be bumpy, but the journey promises to be exhilarating.
