The company said on Thursday that it had received a “staggering response” to the Term Loan B (TLB) with a commitment of about $1.5 billion. It did not disclose the names of participating investors. JP Morgan and Deutsche Bank served as joint lead arrangers for the financing.
“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,” said founder and chief executive Bhavish Aggarwal.
The debt financing comes amid Ola’s planned initial public offering (IPO) next year.
Last week, ET
reported that it had raised $139 million from Mumbai-based investment company Edelweiss PE, IIFL, Siddhant Partners, Tejal Mercantile and Hero Enterprise as part of an ongoing pre-IPO funding round which valued the company at more than $7 billion.
ET was the first to report last month that the funding round was estimated at $250-$500 million.
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The company is expected to file its draft IPO papers soon.
TLBs are loans that can be repaid in 5-7 years.
A large part of the principal amount needs to be repaid only towards the latter part of the loan period, giving flexibility to the borrower.
This is not the first instance when an Indian tech company has raised funds through TLB.
IPO-bound Oyo Hotels & Homes was among the first to raise $660 million in July, while ed-tech company Byju’s raised $1.2 billion through a TLB in November.
Ola said it is one of the first Indian startups to be publicly rated by Moody’s and S&P Global ratings. S&P and Moody’s rated Ola’s first lien term loan B- and B3, respectively, with a ‘stable’ outlook.
Not yet diversified
Ola recently launched a quick commerce business and a used car exchange platform to position itself as a super app before its IPO. Other services include food delivery from its own cloud kitchens and Ola Money, which is owned by a subsidiary called Ola Financial Services.
Unlike its core-ride hailing business where it is dominant, competition in each of the other businesses is intense with larger players.
Ola largely relies on its ride-hailing business for revenue.
According to the company’s financials, 90% of its revenue comes from the core business.
Ola’s parent entity, ANI Technologies, posted its first operating profit inits mobility business since starting operations a decade back.
It reported a standalone operating profit, or Earnings before interest tax depreciation and amortisation, of Rs 89.82 crore for the fiscal year 2021, compared with an operating loss of Rs 610 crore the previous year, ET reported last month.
Its consolidated operating revenue, which includes food delivery and financial services, for FY21 was Rs 983 crore against more than Rs 2,662 crore in FY20.
Its loss after tax was Rs 1,326 crore in fiscal year 2021, compared with Rs 1,714 crore the previous year.
Ola has a separate EV subsidiary, Ola Electric.
reported on Wednesday that Ola Electric has begun delivery of the first 100 electric scooters in Bengaluru and Chennai. The subsidiary raised $200 million led by Falcon Edge and Japan’s SoftBank in October, valuing it at $3 billion.