Ola eyes profit over Rs 1,170 crore by 2019;  SoftBank reaffirms commitment

The SoftBank-backed firm, which is privately held, had posted a net operating loss after tax of Rs 2,781.70 crore in 2016-17.
office of Ola cab service in Gurugram. (Filre | Reuters)
office of Ola cab service in Gurugram. (Filre | Reuters)

NEW DELHI: Cab-hailing app Ola is projected to become profitable during 2018-19 and report a net operating profit of over Rs 1,170 crore, according to a valuation report filed with the corporate affairs ministry.

This is expected to grow further to Rs 6,423.33 crore by 2020-21, the document showed.

The SoftBank-backed firm, which is privately held, had posted a net operating loss after tax of Rs 2,781.70 crore in 2016-17.

The valuation report was compiled by chartered accountancy firm Jain Ambavat and Associates. It formed a part of Ola's disclosure that was made public earlier this month through the filing.

Ola, which has operations in 110 Indian cities, is locked in an intense battle for leadership with US-based Uber. The Bengaluru-based firm's investors include Tencent Holdings, Tiger Global, Sequoia India and Accel Partners US.

Recent reports suggest that Tiger Global is looking at offloading a part of its stake in Ola and that SoftBank might increase its shareholding in the company.

When contacted, a SoftBank spokesperson said: "Ola is a strategically important investment in our global portfolio...

We are confident that our support will help them grow and become one of India's most valuable companies." Ola declined to comment, while an e-mail sent to Tiger Global did not elicit any response.

SoftBank holds about 25 per cent stake in Ola, while Tiger Global has about 13 per cent stake.

Industry watchers pointed out that any move by SoftBank to raise its holding in Ola would need to be approved by the founders.

In May this year, Ola had made changes to its Articles of Association, strengthening the rights of its founders.

One of the clauses states that any investor cannot buy shares in Ola without the approval of founders -- Bhavish Aggarwal and Ankit Bhati.

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