INDIAN ride-hailing firm Ola, backed by Japan's SoftBank Group Corp, aims to begin the IPO process by the end of March 2021 and plans to cut its workforce by up to 5 per cent as part of preparations, said people with direct knowledge of the matter.
The news comes as tech investor SoftBank smarts from the abandoned share sale of major portfolio firm WeWork, as well as its first quarterly loss in 14 years after an US$8.9 billion hit to its Vision Fund, through which it is Ola's top stakeholder.
Ola, officially ANI Technologies Pvt Ltd, is India's homegrown rival to US peer and fellow SoftBank portfolio firm Uber Technologies Inc. Local media have previously reported that Ola was targeting an initial public offering (IPO).
"We are working for IPO-readiness and hope to formally start the process by the end of fiscal 2021," said a senior Ola executive aware of the developments.
As part of that effort, Ola has engaged McKinsey & Company and EY as consultants, said the executive, who declined to be identified as the matter was private.
At the same time, Ola plans to reduce its 4,500-
strong permanent workforce by 4-5 per cent, said another person.
"With a view to become more nimble and have a sharper focus on growth and profitability, we are redesigning the organisation to build a structure that strengthens and leverages our local and global scale and enables faster decision making across all of Ola's group companies," Ola said in a statement.
In a letter to employees dated Nov 27 and seen by Reuters, chief financial officer Harish Abhichandani said Ola needed "to refresh the way" it runs operations and redesign the business.
"As part of this redesign, it is imperative to right-size and bring efficiencies in our core mobility business," he wrote.
Ola was founded in 2010 and operates in over 250 cities. It reported a 16 per cent rise in revenue at 21.55 billion rupees (S$411 million) for the year ended March, while its net loss of 11.6 billion rupees was almost 60 per cent smaller than the year earlier.
IPOs are essential for SoftBank to extract cash from its investments. However, since the WeWork debacle, the firm has had to lower expectations for its IPO pipeline. REUTERS