Ride hailing platform Ola raises USD 500 million debt

Ride hailing platform Ola on Thursday said it has raised USD 500 million debt from marquee international institutional investors.

The company has raised the amount via Term Loan B (TLB). 

Institutional investors that seek higher yields and can stay invested over longer investment horizons compared to traditional banks offer such loans. TLBs usually have a floating interest rate with tenures of 5-7 years.

"The proposed loan issuance received a staggering response from investors with interest and commitment of approximately USD 1.5 billion...Ola is expected to utilize the term loan to fuel its vision for the future of mobility across its various businesses including ride hailing, vehicle commerce, delivery with foods, quick commerce and financial services," Ola said in a statement.

S&P and Moody's had rated Ola's first lien term loan as B- and B3 respectively, with a 'stable' outlook, on the back of strong unit economics and profitability in its market leading Indian ride hailing business, it added.

"The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably," Ola founder and CEO Bhavish Aggarwal said.

JP Morgan and Deutsche Bank served as the joint lead arrangers for this financing.