Ola founders get allotted fresh shares worth Rs 544 Cr - Cyber Suggest
Ola co-founders Bhavish Aggarwal and Ankit Bhati have been among a few dozen entrepreneurs who have successfully scaled their business to multi-billion dollar valuation. And in doing so, the duo has also amassed some great personal fortune.
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| Ola founders get allotted fresh shares worth Rs 544 Cr - Cyber Suggest |
While the value of their stakes in Ola already worth several thousand crore rupees, regulatory filings show that both Aggarwal and Bhati have further added hundreds of crores to their personal net worth after they recently received 2,56,038 equity shares at a nominal price of Rs 10 per share.
These shares were allotted at a nominal price but as per the company’s last valuation, the entire allotment is worth an estimated Rs 544 crore. Aggarwal was allotted 176,646 equity shares worth around Rs 375.4 crore while Bhati received 79,392 shares worth Rs 168.7 crore.
Ola was valued at $6.2 billion (about Rs 44,000 crore) when it raised Rs 2,244 Cr in its Series J round from Korean automotive giants Hyundai & Kia Motors in December 2019. At the time, the value of each share was priced Rs 21,250. We have factored in the same share value to arrive at the value of fresh stocks allotted to both Aggarwal and Bhati.
A spokesperson for Ola declined to offer any comment for the story.
The fresh allotment of shares to Aggarwal and Bhati seems to be part of an agreement with Ola’s investors in the past where its backers agreed to incentivize them on completion of a defined threshold.
As of May 9, Aggarwal held a 7.29% and Bhati nearly 2.7% stake in the company, but following the funding round in December from Hyundai, their stakes were diluted further. The fresh allotments have now strengthened their holdings again.
This isn’t the first time Ola’s founders have been issued fresh shares in the company. Around 2014-2015, both were rewarded with new equity shares on two occasions. These new issues are usually given to keep the founders motivated even as they dilute their holdings during fundraising.
Besides their stake in Ola’s core cab-hailing business, Aggarwal and Bhati also owned 25.17% and 11.52% respectively in Ola Financials at the end of FY19. Ola also has a separate electric vehicle business called Ola Electric. Unlike ANI Technologies (owner of Ola) and Ola Financial Services, Bhati is not a shareholder in Ola Electric.
Incorporated in 2017, Ola Electric had turned into a unicorn within a few months of Aggarwal picking up 92.5% of the company last year. As per media reports, the exclusion of Bhati from the company had created a rift between the two founders. According to The Morning Context report, the way Aggarwal had sidelined Bhati from Ola Electric raised concerns over corporate governance.
Welcome to our blog “CYBER SUGGEST“. Debmalya Datta is a professional Blogger, Developer, Social Media Influencer, Digital Marketer and Entrepreneur. He loves doing work which makes him happy, that’s why he choose Blogging and Educate people. You will love exploring educational stuff on our blog. Live your dreams as much as you can. Be a SHAMELESS SELF-PROMOTER
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