New Delhi– U.S.-based investment giant Vanguard has significantly marked down the valuation of Indian ride-hailing firm Ola to $1.25 billion, according to its latest filing with the U.S. Securities and Exchange Commission (SEC). The revision represents an 80% drop from Ola’s peak valuation of $7.3 billion in 2021.
This is the second major markdown by Vanguard in recent months. In February 2024, the asset management firm valued the Bhavish Aggarwal-led company at $1.88 billion, later adjusting it slightly upward to around $2 billion in November. The latest downgrade comes as Ola struggles to retain market share in India’s increasingly competitive ride-hailing landscape and faces uncertainty surrounding its long-anticipated public offering.
Once a dominant player in the Indian market, Ola has now slipped to third in daily ride volumes, trailing behind Uber and the rapidly growing Rapido. Backed by food delivery firm Swiggy, Rapido has expanded aggressively, offering bike taxis, auto-rickshaws, and cab services. It attained unicorn status in 2023 after securing $200 million at a $1.1 billion valuation.
In an attempt to diversify, Ola rebranded its ride-hailing arm as Ola Consumer in August 2024, integrating a range of services including financial products, cloud kitchens, and electric mobility under one umbrella. The company converted into a public entity in November 2024 and has been exploring IPO options since then, but progress has stalled amid poor market sentiment and waning investor confidence.
Analysts now believe that Ola may delay its IPO plans by at least six months, citing falling valuations and growing concerns over the performance of its electric vehicle unit, Ola Electric.
Adding to the company’s challenges, credit rating agency ICRA recently downgraded the debt rating of Ola Electric Mobility Limited’s automotive division. The agency cited weak sales growth and a prolonged timeline to profitability, lowering the rating on four debt instruments from ‘A’ to ‘BBB+’ while maintaining a negative outlook.
According to ICRA, Ola Electric has struggled to scale its electric two-wheeler operations, resulting in higher-than-expected cash burn and further uncertainty over the path to sustained profitability. The company may need to raise fresh capital over the next 12 to 24 months to stabilize operations, as its current cash reserves continue to diminish.
With mounting financial pressure and increasing competition, Ola’s once-promising trajectory is facing a pivotal moment—marked by investor skepticism, delayed IPO ambitions, and a pressing need to reestablish its footing in both the mobility and EV sectors. (Source: IANS)
