Moody’s downgrades Ola to ‘Caa1’ on weak finances, low liquidity
Mumbai: Moody’s Ratings has downgraded ANI Technologies Pvt Ltd, the parent company of ride-hailing platform Ola, from ‘B3’ to ‘Caa1’ and revised its outlook to negative, citing deteriorating financial performance, declining liquidity, and a heightened risk of breaching loan covenants.
The global rating agency said Ola’s operating cash flows have weakened, with slower revenue growth and continued losses raising refinancing risks.
“Moody’s Ratings (Moody’s) has downgraded ANI Technologies Pvt Ltd’s (Ola) corporate family rating (CFR) and the rating on the guaranteed senior secured term loan borrowed by OLA Netherlands B.V. to Caa1 from B3. The loan is guaranteed by Ola,” the agency said in a release.
The downgrade follows higher-than-expected cash burn during the six months ending September 30, 2025, which eroded Ola’s cash reserves from $90 million in March 2025 and reduced its buffer under loan covenants.
A potential covenant breach could trigger a default and accelerate repayment of Ola’s $65 million loan due in December 2026. Under the loan terms, Ola must maintain cash reserves equal to at least 40% of the outstanding loan, or $26 million, to remain compliant.
Moody’s expects intense competition in India’s ride-hailing market to keep pressure on margins and cash flows over the next 12 months, forcing Ola to depend on external funding to refinance its upcoming maturities.
The agency described Ola’s liquidity as “weak,” warning that available cash may be insufficient to cover debt obligations and capital spending through December 2026.
Ola is exploring funding options, including a potential initial public offering (IPO) and the sale of its 3.64% stake in Ola Electric Mobility Ltd, valued at about $90 million, though Moody’s cautioned that both are subject to execution and market risks.
Separately, Ola Electric Mobility Ltd, led by Bhavish Aggarwal, reported a net loss of ₹418 crore for the July–September quarter (Q2 FY26), according to an exchange filing this week.
Revenue from operations fell 43% year-on-year to ₹690 crore from ₹1,214 crore in Q2 FY25, marking a sharp decline in quarterly sales.
