Ola Consumer, previously known as Ola Cabs, has revealed its intentions to prepare for an initial public offering (IPO). This move is seen as a critical step for founder Bhavish Aggarwal to secure necessary funding for the financially struggling company. With increasing competition from rivals like Uber and Rapido, raising capital has become imperative for Ola's survival in the market.
In its annual report submitted to the ministry of corporate affairs, Ola Consumer confirmed that its Board of Directors has approved the IPO process. This announcement comes after a significant delay, as the report was filed more than six months past the statutory deadline.
Credit rating agencies S&P Global Ratings and Moody’s Investors Service have highlighted Ola's declining cash reserves, which have become a pressing concern due to upcoming debt obligations and delayed listing plans. Despite the board's approval, the company has yet to take formal steps towards launching the IPO.
Industry experts emphasize the urgency of raising funds, particularly as competitors like Uber and Rapido are aggressively investing in their operations. Ola has secured approximately $3.84 billion from various investors, including SoftBank and Tencent, since its inception.
Market Dynamics
As of the end of FY25, Uber and Rapido have reported substantial cash reserves, with Rapido holding ₹345 crore and Uber ₹292 crore. In contrast, Ola's market share in the cab sector has significantly decreased, dropping to 20-25% from 40-45% in 2023. Meanwhile, Uber maintains a market share of around 45%, while Rapido has increased its presence to over 20%.
According to Subhabrata Sengupta from Avalon Consulting, Ola's loss of market share and brand equity indicates that the IPO may be a strategy to inject funds into the broader group.
Amit Kaushik from Mobidx Ai noted that Ola will need to invest heavily in driver incentives and promotional activities to regain lost market share. He acknowledged the intense competition and the necessity for significant cash influx to facilitate recovery.
Financial Overview
Ola Consumer's net worth has plummeted by 57%, falling to ₹1,490 crore at the end of March 2025 from ₹3,451 crore a year prior. This decline is attributed to increased operating losses and a significant drop in the share price of Ola Electric, the group's electric two-wheeler manufacturer.
Since its establishment in 2010, Ola Consumer has accumulated losses totaling ₹21,213 crore. As of March 2025, the company had only ₹180.3 crore in cash and cash equivalents, a stark decline from ₹374.1 crore the previous year. Including investments, total cash and bank balances stood at ₹652.8 crore, down from ₹1,394.8 crore.
The operating cash burn for Ola Consumer in FY25 was approximately ₹742 crore, with total borrowings reaching ₹586.2 crore.
Ola's revenue from its cab services was ₹924.5 crore in FY25, with additional income from financial services and logistics contributing to a total revenue of ₹1,170.9 crore.
As larger competitors like Uber possess stronger financial backing, they can afford to offer incentives and discounts to maintain their market positions. S&P has pointed out that Ola's continual delays in IPO plans since 2020 could jeopardize its future, particularly if it fails to secure necessary extensions for its compulsorily convertible preference shares holders.
