Ola board okays proposal to issue fresh shares worth $355 mn for fundraising

Ola board okays proposal to issue fresh shares worth $355 mn for fundraising
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Ola’s board has allowed the homegrown cab-hailing firm to issue new shares worth $355 million (Rs 2,469.80 crore at current exchange rate) for fundraising purposes, filings with the corporate affairs ministry revealed.

A person in the know said that the board has taken this step so that the firm can receive the $300 million commitment made in March by Korean-based automotive majors Hyundai Motor Co. and Kia Motors Corp. The person added that investors that have bet on Ola recently may also purchase fresh shares in the cab-hailing company.

In February, new foreign investors had ploughed Rs 112 crore ($15.6 million) into Ola: Raymond S Cahnman, chairman of trading firm TransMarket Group; New York-based philanthropists Steven Price and wife Tina; J3T Ventures; and investment firm Lyon Assets.

E-mail queries to Ola did not get a response till the time of filing this report. The firm has been raising funds from a diverse set of investors in recent times in what is being viewed as a move to widen its investor base.

In February, Ola pocketed Rs 650 crore ($92 million) from Flipkart co-founder Sachin Bansal. In January, Ola secured Rs 520.8 crore ($74 million) from previous investor Steadview Capital.

For Ola, the fundings come at a time when media reports state that it is in the midst of raising a larger $1 billion round.

According to reports, potential investors could include Singapore state investment firm Temasek and South African technology conglomerate Naspers. In fact, Temasek and Ola founders Bhavish Aggarwal and Ankit Bhati had sought to buy a 10% stake in the company through secondary purchases.

Previous filings also revealed that Ola had raised around $52 million from three Chinese investors, Eternal Yield International, Sailing Capital and China-Eurasian Economic Co-operation Fund.

Ola has entered three overseas markets—Australia, the United Kingdom (UK) and New Zealand—over the past year, as part of its efforts to keep competition at bay. It also operates in online food delivery via the acquisition of Foodpanda’s India operations. Foodpanda has expanded to 100 cities, going by a recent company announcement.