Ola, linked to the IPO, is seeking to expand its financial services business and also obtain an NBFC license through acquisition, sources said.
Ola is reportedly in talks to acquire at least 3 companies to increase its engineering, product and loan servicing capabilities to support the rapid growth of the financial services industry, two sources with direct knowledge of the development said.
The companies being considered for acquisition are registered Non-Banking Financial Companies (NBFCs), which offer both secured and unsecured loans.
Ola will leverage acquisitions to provide auto financing as well as personal loans, they said.
Although the company did not immediately comment, sources said Ola has drawn up aggressive expansion plans for its financial services business.
According to his RoC (Registrar of Companies) filing, Ola had recently invested ₹786 crore in its financial services business
Ola already offers its Buy Now, Pay Later – Ola Postpaid product which is available to over 40 million customers and is expected to reach 100 million customers within the next six months.
Its vehicle finance business is already growing rapidly thanks to the success of Ola Electric, which has already become India’s leading maker of electric vehicles, as well as the used car business, Ola Cars, which is experiencing rapid growth trajectory and is expected to sell $2 billion GMV (gross merchandise volume) in its first year of launch.
In addition to ramping up its lending business, Ola is simultaneously seeking insurance and insurance brokerage licenses to further strengthen its ability to offer innovative products such as pay-per-use auto insurance based on telematics, sources said.
Ola has sold nearly 700 million policies to date and the GMV of its insurance business has increased more than 3x in 2021.
It now provides for a gross written premium of more than ₹1000 crore in 2022 and will add several new offerings, including an insurance marketplace for gig economy workers beyond its driver-partners.
India’s auto loan industry, growing at a compound annual growth rate (CAGR) of 8%, is expected to reach $60 billion by 2026. Meanwhile, auto insurance, which is an industry of 9 billion in FY21, is expected to generate a CAGR of 14.8%. over the next 10 years to reach USD 36 billion by FY31.
Ola, with more than 165 million customers, is one of the largest consumer internet platforms in the country and adding financial and insurance services to its offerings is a natural extension.
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