ANI Technologies Pvt. Ltd, the operator of ride-hailing service Ola, plans to go public in less than two years after meeting profitability goals required for such a listing in India, two people aware of the discussions said.
Ola is expected to have turned its maiden annual profit in the year ended 31 March, the first step towards the goal of an initial public offering (IPO), as local exchanges require companies to be profitable for at least three years before they go public, the two people said on condition of anonymity. Ola has not filed its financials for FY19 with the ministry of corporate affairs (MCA).
An IPO will help many of the ride-hailing company’s investors, including SoftBank, to exit or partially sell their stakes and return funds to their shareholders.
The trust fund will be co-managed by Ola’s small, medium and individual investors, as well as ARK, according to the second person cited earlier. “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,” said the second person.
The impact asset management fund invested around ₹35.8 crore in ANI Technologies for its ongoing Series J round at a valuation of around $7 billion, show filings.
A spokesperson for Ola did not respond to an email seeking comment on the proposed IPO.
There are frequent differences between foreign investors at the board level, as SoftBank insists that its portfolio companies go public, said the first person.
“Most of the differences on the IPO listing arose between SoftBank, a new incoming Japanese investor, and Mirae Asset Fund, an existing investor… and hence Mirae has got in ARK as a co-investor in the current round… Another investor, Hyundai, also Korea-based, is pushing for an Ola IPO,” said the person.
Ola’s domestic IPO plans come at a time when arch-rival Uber’s (also a SoftBank investee firm) IPO and stock performance on the NYSE has been tepid. Uber, which saw a private valuation of much as $76 billion before its public offering in May, has a market cap of nearly $49 billion now.
To be sure, listing in India is not easy. Ola faces multiple regulatory roadblocks before it can even file a prospectus. Currently, Ola has two available paths to its proposed public listing—through the Securities and Exchange Board of India-regulated Innovator’s Growth Platform (IGP) meant for SMEs and startups, or a direct listing on BSE or NSE. According to the second person, Ola will look at a direct listing, rather than on the IGP platform. This apart, the capital market regulator’s default rules for direct listing state that promoters, including funders, should contribute at least 20% of the total paid-up capital. Ola’s promoters, however, contribute less than 20% of the paid-up capital.
Talks of a public listing come at a time when Ola co-founders Bhavish Aggarwal and Ankit Bhati made sweeping changes in the promoter shareholding structure to gain tighter control over ANI Technologies. In April, the co-founders increased their ownership in ANI through a rights issue, according to documents sourced from MCA. In total, the promoters, including founders, directly own 11-12% in ANI, according to Tracxn, a data tracker.
This article was first published on livemint.com