Ride-hailing giant Ola is planning to come out with an Initial Public Offering (IPO) in under two years after achieving profitability targets imperative for going public in India. According to the local exchanges' conditions, companies are required to be profitable for at least three years before announcing their IPOs.
The cab aggregator is likely to have taken the initial step towards its IPO goal by earning its maiden annual profit in the year ended 31 March (FY19), sources told the Livemint. Ola is yet to file its financials for FY19 with the corporate affairs ministry.
The ride-hailing company is eying a listing on BSE or NSE, the report added.
The IPO will aid many of Ola's investors including SoftBank exit or sell their stakes partially and return funds to their shareholders.
Meanwhile, the cab aggregator's latest investor, ARK Impact Asset Management had set up a pre-IPO trust fund recently, as per ANI Technologies Pvt Ltd filings with the corporate affairs ministry last month. The company is the operator of Ola.
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.
The filings further show that ARK made an investment of nearly Rs 35.8 crore in ANI Technologies for its ongoing Series J round at over $7 billion valuation.
An assessment report submitted to Ola's stakeholders in February 2017 estimated a profit by the cab-hailing giant of nearly Rs 1,170 crore in FY19, with a free cash flow of Rs 698 crore.
Ola had reported a 44% jump in its revenue to Rs 1,860 crore in FY18 (2017-18) from nearly Rs 1,286 crore in FY17 (2016-17).