Ola Cabs plans $500 million IPO, eyes $5 billion valuation

Ride-hailing giant Ola Cabs is gearing up for an initial public offering (IPO) to raise $500 million, aiming for a company valuation of approximately $5 billion, according to three sources familiar with the matter.

Backed by SoftBank, Ola is leading competitor to Uber and intends to submit papers for regulatory approval to the country's market watchdog within the next three months, the sources, who requested anonymity due to the confidential nature of the information, revealed to Reuters on Friday.

When approached for comment, Ola declined to provide any statement on the matter.

The company is currently engaged in discussions with investment banks, including Goldman Sachs, Bank of America, Citi, Kotak and Axis. It plans to finalise the appointment of IPO advisers within the next month, as disclosed by two of the sources.

While Citi and Bank of America declined to comment, the remaining banks did not respond to requests for comments.

This marks Ola's second endeavour at an IPO, following an aborted attempt in 2021 to raise up to $1 billion.

In 2021, Ola garnered a valuation of $7 billion in a fundraising round. However, its valuation has since been revised downwards by its investors in internal assessments. Vanguard, one of Ola's shareholders, slashed its internal valuation of the company to $1.9 billion in February, according to a Reuters report.

Among its notable investors are Warburg Pincus, Temasek, and Tiger Global Management.

Founded by Bhavish Aggarwal, a prominent figure in India's startup ecosystem, Ola Cabs has drawn comparisons to Tesla's Elon Musk. Aggarwal also heads Ola Electric, India's leading electric scooter manufacturer.

Ola Electric is concurrently pursuing its own IPO plans, having filed regulatory papers for approval in December last year, as reported by Reuters.

(With Reuters inputs)