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Mobility unicorn Ola’s board is divided over no-promoter and promoter route of IPO listing, as CEO Bhavish Aggarwal looks to list on the Indian stock exchange.
According to a source aware of the development, “Ola plans to file its DRHP in a few months, depending on the decision on the route of listing. Aggarwal is interested in going for a promoter route of listing but the company’s board is divided.”
Ola is looking to go public by next year and is expected to raise around $1-2 billion from the IPO. Recently- listed Zomato had taken the ‘no promoter’ route for its IPO, which means the company does not have a promoter and is instead professionally managed.
In the ‘no promoter’ route, the CEOis a part of the company’s board but not the sole decision maker. He continues to draw a salary like any other company employee and gets profits based on his shareholdings but special rights or management control is taken away. In the ‘promoter’ route, if the CEO has some shareholding, along with differential voting rights, he remains the sole decision maker and can take final decisions on crucial events like mergers and acquisitions, dilutions investments etc.
Given that most tech start-ups are loss-making entities, ‘no promoter’ listing is considered the preferred route, as it does not involve shareholders to lock-in their capital. However, Ola's Aggarwal prefers the ‘promoter’ route.
Marquee investors
In July, Temasek, Warburg Pincus and cofounder Bhavish Aggarwal had invested $500 million in Ola. The company has a clutch of marquee investors on its board including SoftBank, Steadview Capital, Tiger Global Management and Matrix Partners, among others.
Ola Cabs has crossed pre-Covid GMV levels earlier this month and the recovery from the second Covid wave is said to be three times faster than the first wave. Further, 10 million people are reported to have used Ola for the first time ever in FY2021.
“As people move, they want to feel safe so they’re switching to personal or shared mobility instead of public transport. Many are moving to autos taking our auto business to almost 150 per cent of pre-Covid levels,” Aggarwal said in a company blog. The company claims to be onboarding more driver partners, and expanding into new cities and launching new products.
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