EXCLUSIVE: Ola IPO either later this year or early next year, says CEO Bhavish Aggarwal

Ola (ANI technologies), which was very close to file for IPO (initial public offering), has deferred its plans looking at the present choppy market scenario. According to a recent EY Global IPO Trends report, Indian markets saw 16 IPOs in the first quarter of the year against 23 IPOs in Q1 of 2021. The report says that volatile market conditions have led to a significant slowdown in the IPO market during the first quarter of 2022.

“We were actually very close to filing. We as a board took a call to do it later. It could be later this year or early next year because we’re actually ready. Our ride hailing business is very profitable. Our investors are very supportive on the strategy on listing. There’s no urgency for us to list. When we come to the market, some people will be positively surprised unlike some of our consumer internet peers,” Aggarwal says.

Some of the biggest investors in India’s start-up ecosystem like SoftBank, Sequoia Capital and Tiger Global have decided to slow on investments this year.  Masayoshi Son, founder and CEO of Japanese conglomerate SoftBank, said that this year the group will likely invest only half or even a quarter of what it did in 2021. 

This comes after its Vision Fund reported a record loss of $26 billion for the year. Tiger Global, another aggressive investor in the Indian consumer internet companies, reported a loss of $17 billion. Many Indian tech start-ups struggling to secure investments as aggressively as they did in 2021 hints at the beginning of a “funding winter” phase. 

Industry analysts believe that this might lead to a correction in start-up valuations and will push them to define a clear path to profitability for future investments.

Aggarwal said that he was the only one in the start-up community who was talking about profitability four years ago.

“We’ve to focus a lot more on value creation rather than valuation. ‘Funding winters’ are cycles which come and go. This time it’s obviously a much more multi-faceted cycle. That’s okay. In general companies should focus a lot more on business fundamentals than vanity growth,” he told Business Today.

He added this is the time when a lot of vanity growth companies will be separated from the ones who’ve genuinely built value. “Valuation can fluctuate but that doesn’t bother me personally. Our capital profile is fairly broad. We’ve much smarter about capital efficiency we don’t have the need to keep raising every few months. Investors will have their own business models and challenges. Tech valuations have gone down and these are cycles which evolve. Periodically we’ve given exits to investors,” he said.

“In six months things will be more optimistic, investors will be happy again but our strategy is not dependent on our investors’ mood. Our motivation is built on a long term future.”