Exclusive: Ola’s IPO on the cards this fiscal

Another tech company is eyeing the public markets. Mobility major Ola is preparing for an initial public offering (IPO) in the first half of 2022, said two people aware of the company’s plan. With this move, the SoftBank-backed firm would be joining a clutch of companies such as Paytm, PolicyBazaar, CarTrade, Nykaa and Mobikwik who are all set to make their debut as a publicly listed entity this year.

“Ola has started talking to bankers for a potential IPO in the next six to eight months,” said one of the sources requesting anonymity. “Top management at Ola have set a target for public listing by the end of this fiscal [FY22], but the timeline could be stretched by a few months.” 

The preparations for the IPO have been ongoing since the beginning of this financial year. Ola had also raised $500 million from Warburg Pincus and Temasek in a pre-IPO round. 

During this round, co-founder Bhavish Aggarwal had invested to increase his ownership in the company in a move seen to be in line with the company's public listing plans. It’s worth noting that Aggarwal has been prioritising Ola Electric since early 2020, which recently started pre-booking of its e-scooters. 

Four-year-old Ola Electric attained the ‘unicorn’ status in July 2019, making it one of the few startups to achieve the $1 billion valuation in a short time. It recently announced the set up of a sprawling production facility for electric two-wheelers in Chennai with a capacity to produce 10 million scooters in a year.

Meanwhile, Ola is also entering the pre-owned vehicles business with Ola Cars. Entrackr had exclusively reported about its new vertical on July 28.

“The mobility sector has been recovering and if third-wave doesn’t come into the picture, the cab-hailing industry would recover fully in the next four-five months. The company’s top management including Aggarwal believes that early 2022 would be the perfect time for the IPO,” said the second source who also wished not to be named as the plan is yet to be public.

As per sources, the IPO plan will be presented to Ola’s board for approval in the next few weeks. 

Ola declined to offer comment on the story.

On Wednesday, Ola also expanded its ESOP pool to Rs 3,000 crore with an additional allocation of Rs 400 crore fresh stock for its employees. This makes Ola ESOP scheme one of the largest in the Indian startup ecosystem. Paytm and Oyo have ESOPs worth over Rs 4,000 crore while edtech decacorn Byju’s ESOP pool worth is more than Rs 3,000 crore.

Ola’s public debut would be a defining moment for the ecosystem after Zomato and the imminent launch of the country's largest IPO ever from Paytm. As per their draft red herring prospectus or DRHP, Paytm and MobiKwik are in the pipeline to raise Rs 16,600 crore and Rs 1,900 crore worth IPO respectively. 

SoftBank-backed PolicyBazaar is also planning to raise up to Rs 6,500 crore through its IPO. CarTrade, which is reportedly planning to list on August 9, is likely to raise Rs 2,000 crore through its IPO.