India’s largest ride-hailing company, Ola, took a step closer to the public market with the announcement of an EGM to take place on November 14 to discuss its much-awaited IPO.
ANI Technologies Private Limited parented Ola, a company based in Bengaluru, served formal notice to shareholders on EGM. In turn, this sets the ball rolling for what could be India’s most eagerly awaited IPO from the tech sector. Following Ola Electric’s successful public debut, Ola’s second big listing will be Ola under the leadership of its CEO and co-founder Bhavish Aggarwal.
Why is the EGM significant, and what’s on the agenda?
The EGM, as per an October 23 email by Gagandeep Singh, Office of the Company Secretary at Ola, is meant to discuss the company’s readiness for the proposed IPO, subject to market conditions, regulatory approvals, and other requirements. The IPO plans will include an issue of fresh equity shares as well as an offer for sale by existing shareholders.
Now, the company would submit a draft red herring prospectus to regulators in the coming weeks. Talking to sources close to the matter, “Ola is expected to submit the DRHP within three to four weeks.” This will give investors a better peep into the company’s financials business plans and valuation metrics, quite an essential yardstick while evaluating the IPO potential.
Who Is Leading and What Could the IPO Offer?
Restructuring will be huge for Aggarwal as he prepares Ola for an IPO. In August, he came out with a rebranding plan that would expand Ola Cabs into “Ola Consumer” with diverse services ranging from financial solutions to cloud kitchens and electric logistics. This forms part of Aggarwal’s vision of making Ola a complete consumer services company in keeping with his IPO plans.
How does Ola stand on the finance side and how it plan to grow
Ola’s financial growth in the last few years has been promising. On Thursday, ANI Technologies parent company of Ola-had delivered a 42% year-on-year revenue jump to Rs 2,799 crore for FY23. It had also reduced losses by almost 50% to Rs 772 crore. This upward trajectory will be very significant in attracting any investor who is keen on investing as Ola prepares for its public list. Official figures, however, for FY24 are yet to be declared.
What Ola’s Investors Are Saying About Valuation
Ola has had its fair share of valuation issues since it IPOd, especially after Vanguard recently assessed the cab company to be around $2 billion as of August 2024, from a $7.3 billion valuation back in 2021. Vanguard’s valuation marked a slight recovery from $1.88 billion in November 2023, showing modest growth but also indicating that Ola has a tough time maintaining investor confidence.
The prospects of Ola’s IPO are very much dependent upon the market’s mood since recent times have also seen the flip-flops of the fortune of Ola Electric shares. Ola Electric, having recently entered the IPO route back in August, started at Rs 157.53 but fell to an all-time low at Rs 72.6 per share. This current volatility in the stock price of Ola Electric would play a tremendous role in the investor’s mindset about the IPO by Ola.
The EGM that is going to take place will be an important juncture in determining the strategic future of Ola as it approaches closer to its IPO. This would mark an important step in realizing Aggarwal and Ola’s leadership vision to make Ola the leading name for India’s tech-driven consumer service. Whether Ola can find its way through growth and restructuring to evoke confidence among public investors will be something to watch.
