IPO-bound mobility platform Ola on December 16 announced that it has raised $500 million debt financing from marquee international institutional investors through a Term Loan B route, joining the likes of Byju's and Oyo.
While the company didn't disclose the specific names of investors, it claimed to have received a commitment of approximately $1.5 billion from investors.
The company said it plans to utilize the term loan to accelerate its vision for the future of mobility across businesses such as ride hailing, vehicle commerce, delivery with foods, quick commerce and financial services. J.P. Morgan and Deutsche Bank served as the joint lead arrangers for this financing.
In November, Moody's Investors Service had assigned a first-time B3 corporate family rating (CFR) to the company's proposed term loan, while S&P had rated the loan as B- with a stable outlook.
“The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably” said Bhavish Aggarwal, Founder & CEO, Ola.
This announcement comes close on heels of Ola Electric starting the deliveries of its much-delayed electric scooters on December 15. The Bengaluru-based ride hailing major said it has delivered scooters to 100 customers in Bengaluru and Chennai.
After selling nearly Rs 1,200 crore worth of scooters in September 2021, Ola started facing heat from customers in recent weeks over the delay in the delivery date of its scooters.
Ola has also raised about $139 million (Rs 1,048.6 crore) from a clutch of investors including IIFL, Edelweiss, and Sunil Munjal-led Hero Enterprise, in what appears to be a pre-IPO financing round, Moneycontrol reported on December 9.
While Edelweiss has invested about Rs 250 crore, IIFL has pumped in Rs 187.5 crore and Hero Enterprise has invested about Rs 112.5 crore. Ola has also allotted shares worth Rs 100 crore to former Zandu promoters Parikh family and Siddhant Partners while shares worth Rs 50 crore have been allotted to Biovet, an animal health vaccine producing firm.
Famy Care Group's Ashutosh Taparia and Sanjeev Taparia have also been allotted shares worth Rs 13 crore apiece while Vicco Group have been allotted shares worth Rs 10 crore. Ola had previously raised $500 million financing led by private equity giants Temasek and Warburg Pincus in July this year.
Meanwhile, Ola Electric, which was spun out of the ride-hailing major Ola in 2019, had also raised about $52.7 million (Rs 398.3 crore) from investors such as Temasek, IIFL, Edelweiss, Vijay Shekhar Sharma’s VSS Investco and DST Global's Rahul Mehta.
This financing came a couple of months after it raised $200 million financing led by Falcon Edge, SoftBank and others, at a valuation of $3 billion in September this year.
Ola, which is gearing up for a public market debut next year, has however witnessed a spate of exits in recent weeks, including its Chief Financial Officer Swayam Saurabh, Chief Operating Officer Gaurav Porwal, General Counsel Sandeep Chowdhury, and Ola Electric's Head of Quality Assurance Joseph Thomas among others.
The firm has also once again taken the plunge into online grocery delivery with the launch of its services across Mumbai and Bengaluru with almost 15 dark stores, Moneycontrol reported in November this year.
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