Ola's cab business recovers to pre-pandemic levels ahead of IPO

Mumbai: The gross merchandise value (GMV) of Ola crossed the pre-pandemic levels in the week to August 31, CEO Bhavish Aggawal said on Tuesday. Recovery from the second Covid-19 wave has been three times faster as compared with the first wave of infections last year, he said.

For the ride-hailing company, GMV would be the value of total rides—cabs as well as autorickshaws—taken on the platform over a certain period of time.

“Clearly India is up and about!,” the founder of the IPO-bound startup tweeted.



According to Aggarwal, 10 million people used Ola cabs in the fiscal ended March 31, a first for the company. “As people move, they want to feel safe so they’re switching to personal or shared mobility instead of public transport,” he said. “Many are moving to autos, taking our auto business to almost 150% of pre-covid levels.”

More than 300,000 Ola drivers are now vaccinated, Aggarwal said. “We’re onboarding more driver partners, entering new cities and building new products to better serve all your mobility needs post covid.”

A few days ago, Aggarwal had tweeted that the company was redoing its “driver experience”. "Will solve many issues around payments, cancellations, etc., for drivers, customers. 1-2 months will see significant improvement," he tweeted on August 27. He did not share details on what those improvements would be.

Pandemic Impact
India’s ride-hailing sector—dominated by Uber and Ola Cabs—screeched to a halt in the aftermath of the world’s strictest coronavirus lockdown last year but recovered more than half of the business by January, only to be slammed shut by the second wave of the pandemic in April-May.

But Ola has used the pandemic times to diversify its business. The Bengaluru-based startup is setting up the Ola FutureFactory near Krishnagiri in Tamil Nadu to make electric scooters—the first models were launched last month. The company is also entering the used-cars retail segment through ‘Ola Cars’.

Ola IPO
Ola is exploring an initial public offering early next year to raise as much as $1.5-2 billion at a valuation of $12-14 billion, ET reported on August 31. The IPO is likely to be an equal mix of fresh shares and an offer for sale, according to the ET report. Morgan Stanley, Goldman Sachs, Kotak Mahindra Capital, Citigroup and JPMorgan are understood to be working with the company to file draft papers with the markets regulator.

In July, the company raised $500 million from private equity fund Warburg Pincus and Singapore's Temasek Holdings in a secondary transaction. Ola is also expanding its ESOPs pool to Rs 3,000 crore and giving employees an additional Rs 400 crore in stocks in the run up to its IPO.