Ola nabs $500Mn term loan, seeks to raise over $1Bn funding

Indian mobility platform, Ola has successfully raised $500 million through a TLB (Term Loan B) from Marquee International institutional investors.

As per credible sources, the company will be leveraging this fund to fulfill its mobility goal across its various businesses, including vehicle commerce, quick commerce, ride-hailing, delivery with foods, and financial services.

The firm had recently raised $139 million which comes as a part of a $1 billion funding round for which it is currently in discussions with investors. Following this, the company could reach an estimated valuation of around $7.5 billion.

According to Ola, the planned loan issuance received an overwhelming response from investors, with commitment and interest of around $1.5 billion. A term loan helps the borrowers with huge cash upfront in exchange for specific borrowing terms.

Experts say that generally, term loans are granted to small businesses that require a case for purchasing equipment, a new building for the production processes, or any other fixed assets.

As per Ola, it is the very first Indian startup that has been publicly rated by top international rating agencies Moody's and S&P.

Apparently, Moody's and S&P rated Ola's first-lien term loan as B- and B3, with a strong outlook on supporting strong unit economics and viability in its market-leading Indian ride-hailing business.

Bhavish Aggarwal, Founder and CEO, Ola, said that the irresistible response which the firm has received in term loan B signifies the strengths of the business and its constant focus on enhancing unit economics along with rapid growth.

Ola is fast-tracking its journey towards building the New Mobility environment to help people move sustainably. Furthermore, it said that this is a breakthrough transaction as their firm is among the few Indian companies which have raised capital via the TLB route.

Source Credit - https://www.business-standard.com/article/companies/ola-raises-500-mn-term-loan-in-talks-to-raise-1-bn-at-7-5-bn-valuation-121121600629_1.html