Ola going Public?

Word has it that Ola posted its maiden profit for the previous financial year, the first step towards an Initial Public Offering (IPO), although ANI Technologies Pvt. Ltd., the operator of Ola, has not filed its financials with the Ministry of Corporate Affairs (MCA), though Ola was expected to have turned a profit of Rs. 1,170 Cr.

Ola is looking to list itself on either BSE or NSE. The watchdog SEBI requires a company to be profitable for a minimum of 3 years before they can list themselves. This comes at a time when Ola’s rival Uber’s IPO and stock performance has been off – hand. Uber’s valuation slumped from a Pre – IPO Valuation of $76 Billion to just above $49 Billion now.

This also comes at a time when other Indian Unicorns such as Oravel Stays (OYO) and Flipkart look to list themselves on the US Stock Exchanges since they allow loss making entities to be listed. The IPO will make way for current investors such as Soft Bank to gain some return on their investments.

Meanwhile, the cab aggregator’s latest investor, ARK Impact Asset Management has recently set up a Pre – IPO trust fund recently, as per ANI Technologies Pvt Ltd’s filings with the MCA last month. The idea is to make investments in the trust fund and it gives the investor the benefit of a pre-decided price before the IPO and the subsequent maiden listing.

The said trust will be jointly managed by Ola’s small, medium and individual investors along with ARK, the report added. “Ola has nothing to do with ARK. None of the founders’ stake, etc. is going to go into that (the trust fund). The trust fund is just an investment vehicle set up by ARK,” another source told the news daily.

Ola was valued at $ 6.3 Billion in its latest valuation for the Pre – IPO Trust Fund wherein approximately $ 5 million was invested.

Ola might face a host of regulatory challenges before they can achieve their goal of listing themselves, especially due to the minimum promoter stake required is at 20% whereas the promoters in Ola Cabs only own an 11 – 12% stake despite their recent changes in the shareholding structure in a bid to garner tighter control over the company, sources said.