OLA IPO

Last Updated on December 26, 2023 by BFSLTeam BFSLTeam

ANI Technologies popularly known as OLA is one of the most well-known mobility service platforms, and is all set to go public this year. The Softbank and Tiger-global backed company has appointed Goldman Sachs and Kotak as their investment bankers to carry out the process fruitfully.

The company was valued at Rs. 2 billion in its last funding round back in 2022. However, the valuation process is not finalised yet nor the amount that the company is planning to raise via its IPO. Read along to get further insights about the upcoming OLA IPO.

Also Read: How does an IPO work?

About OLA

Founded in 2010, OLA has emerged as one of the biggest mobility platforms in the country. It has a robust ride-hailing network across the globe including 250 plus cities across India, the UK, Australia and New Zealand. 

Bhavish Aggarwal is the Chief Executive Officer and co-founder of OLA Cabs/Electric. The company offers quality mobility solutions by partnering with over 1.5 million drivers, providing convenience to more than 100 million consumers. Through the OLA App, you can hail a wide range of vehicles like cabs, metered taxis, auto-rickshaws, and motorbikes.

Moreover, OLA has supplemented its EV wing by introducing OLA Electric, which is currently the largest electric two-wheeler manufacturer in India.

About IPO and Objectives

OLA decided to launch its IPO back in 2021, but that got shelved due to several micro-economic factors. The IPO is expected to go live late this year. Furthermore, the amount of valuation the company is seeking at the moment is not clear and a tentative issue size is said to be around Rs. 15,000 crores.

There can be several objectives behind this fundraiser. It is planning to develop a “super app” with the objective of integrating both mobility solutions along with financial services. OLA also has major expansion plans in its EV segment.

Apart from its mobility and EV division, OLA has diversified its business activities across other verticals such as micro-insurance and other financial services through OLA Financial Services Limited.  

Strengths

Here are some of the strengths of the company:

• OLA Cabs is the first cab aggregator in India, therefore it has a first-mover advantage.
• The company has raised several rounds of venture capital investments which has made its platform financially strong.
• The company has recently acquired TaxiForSure which has improved the brand image to a large extent.
• The company does not purchase vehicles of its own. It partners with drivers from all over India and offers ride-hailing services making it a cash surplus business.
• OLA is committed to a dynamic pricing model that enables it to manage supply during high demand and unfavourable weather conditions.

Risks

Each and every business is embedded with a risk factor in it. Here are some of the risks associated with OLA’s business:

• OLA’s cab business is exposed to risk factors that are subject to certain government regulations revolving around its taxi service domain. Therefore, any stringent regulation can have a negative impact on its profitability.
• There are certain gaps or lack of regulation in the drivers’ professionalism and behaviour. As a result, the profitability of its business might be impacted.
• The company is continuously facing tough competition from other ride-hailing services like Uber, Meru Cabs, etc.

Also Read: IPO investment strategy: Tips for investing in an IPO

Summary

OLA has a robust network of mobility services internationally and an established presence in India being the first cab aggregator. It aspires to make significant investments in verticals like electric vehicles, financial services, etc. It has some of the biggest strengths in its line of service with a market share of more than 50%. 

Moreover, OLA has ventured into the youth support segment by integrating AI for maximum output and higher productivity. The capital raised through its upcoming IPO will enable this company to easily transition its various business verticals into a centralised platform.