Ola Fleet Technologies, a unit of Ola which deals with the cab-leasing business of the company, has managed to secure a loan worth ₹1,000 crore ($156.3 million) from Yes Bank.
The loan amount will be used by the company to finance the purchase of more commercial vehicles, used by its driver partners. As a part of the agreement of the loan, the vehicles purchased by Ola will remain as collateral, besides the spares and consumables.
Documents filed by the company with the Ministry of Corporate Affairs suggests that Ola Fleet secured the loan through a hypothecation deed agreement with the bank.
The loan period mentioned in the agreement is 48-60 months and will be based on lease agreements between Ola and its partner drivers. The company is eligible to avail this facility till November 30, 2017. After that period gets over, Yes Bank will take a decision on extending the facility on December 4.
This isn’t the first time Ola Fleet has secured loan from Yes Bank. Last year, the company took a loan worth ₹250 crore. In the past one year, the company took loans from Axis Bank, HDFC Bank and ICICI Bank worth ₹300 crore, ₹200 crore and ₹100 crore respectively.
Earlier this year, Ola itself pumped ₹50 crore into its leasing subsidiary, marking its first significant capital infusion into the entity. While announcing the launch of the leasing programme, Ola said that it would invest ₹5,000 crore in the cab-leasing programme over a year.
Ola bought Delhi-based radio taxi service provider GCabs for an undisclosed amount in January 2015 and then renamed it to Ola Fleet Technologies.
The leasing service addresses one of the major pain points for ride-hailing services — locking drivers on the platform for certain duration of the lease. The period can range from three to four years. It also ensures a steady supply of cars and reduces the burden of spending on driver incentives.