Ola Cabs Plans $500 Million IPO Amid Electric Vehicle Expansion

Indian ride-hailing giant Ola Cabs is gearing up for a substantial initial public offering (IPO), aiming to raise $500 million with a company valuation of approximately $5 billion, according to Reuters.

The SoftBank-backed company, often dubbed India's response to Uber, is reportedly planning to file IPO papers with the country's market regulator within the next three months.

Sources revealed that Ola is currently in discussions with several investment banks, including Goldman Sachs, Bank of America, Citi, and India's Kotak and Axis, with plans to appoint IPO advisers within the coming month.

However, representatives from Citi and Bank of America declined to comment on the matter.

This development follows closely on the heels of Ola Electric, a sister concern of Ola Cabs, which filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi) in December.

Ola Electric aims to raise around Rs 7,250 crore through its IPO, marking a significant milestone as the first Indian electric vehicle (EV) firm to attempt a public listing.

Ola Electric recently attained a notable achievement by becoming the first Indian two-wheeler company to secure a domestic value addition (DVA) certificate under the production-linked incentive (PLI) scheme for the automobile and auto component industry.

This move is expected to enable the company to avail of a 13 percent subsidy on the sales value.

The company has been actively expanding its offerings, with initiatives spanning products, services, charging networks, and battery warranties.

Notably, Ola Electric recently introduced the S1 X (4 kWh) to its portfolio, catering to customers with varied range requirements.

Additionally, it launched an industry-leading 8-year/80,000 km extended battery warranty for its entire product range at no extra cost.

Apart from Ola Electric, Ather Energy, a Bengaluru-based electric scooter manufacturer, is also gearing up for its IPO this year, aiming to raise an estimated $400 million.

The company targets a valuation of about $2 billion, according to insider sources.

Ola's valuation, however, has experienced fluctuations, with its investors revising downwards in internal assessments. Vanguard, an Ola shareholder, reduced its internal valuation of the company to $1.9 billion in February, as per a filing seen by Reuters.

Despite this, Ola remains backed by prominent investors such as Warburg Pincus, Temasek, and Tiger Global Management.

Founded by Bhavish Aggarwal, one of India's prominent startup entrepreneurs, Ola has drawn comparisons to Tesla's Elon Musk. Aggarwal also heads Ola Electric, which stands as India's largest electric scooter manufacturer. In recent months, Ola's ride-hailing business has focused on reducing losses and optimising operations.

Notably, the company announced the closure of its international operations in the UK, Australia, and New Zealand, signalling a strategic shift in its business model.

As Ola Cabs gears up for its IPO, all eyes are on the company's strategic moves amidst the burgeoning electric vehicle landscape and evolving market dynamics in the ride-hailing sector.