New Delhi, May 9 (IANS) US-based asset management firm Vanguard has sharply reduced the valuation of ride-hailing company Ola to $1.25 billion, according to its latest filing with the US Securities and Exchange Commission (SEC).
This marks a significant drop of over 80 per cent from Ola’s peak valuation of $7.3 billion in 2021.
Earlier in February 2024, Vanguard had valued the Bhavish Aggarwal-led company at $1.88 billion for the first time, later revising it slightly upward to around $2 billion in November last year.
The latest markdown comes as Ola continues to lose ground in India’s competitive ride-hailing market, even as it eyes a public listing.
Currently, Ola has slipped to third place in daily ride volumes, trailing behind Rapido and Uber.
Rapido, backed by Swiggy, has emerged as the new market leader, offering bike taxis, autos, and cab services.
The company became a unicorn last year after raising $200 million at a valuation of $1.1 billion.
In August 2024, Ola CEO Bhavish Aggarwal announced the rebranding of Ola Cabs to Ola Consumer, bringing together various services like financial products, cloud kitchens, and electric logistics under one brand.
Although Ola converted into a public entity in November 2024 and has been exploring IPO possibilities since then, no firm steps have been taken so far.
Market analysts now expect the company to delay its IPO by at least six months due to weak market conditions and falling valuations, particularly for its electric vehicle arm Ola Electric.
Meanwhile, ratings agency ICRA has downgraded the debt rating of Ola Electric Mobility Limited’s automotive unit due to slower-than-expected sales and a challenging road to profitability.
The agency lowered the rating of four debt instruments of Ola Electric Technologies Private Limited from ‘A’ to ‘BBB+’ and maintained a negative outlook, citing the company’s delayed sales growth in electric two-wheelers.
ICRA contended that Ola Electric has struggled to ramp up its electric two-wheeler sales, leading to higher cash burn and pushing back the company’s path to profitability.
As a result, the company may need to raise additional funds in the next 12 to 24 months as its existing cash reserves continue to deplete.
–IANS
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