Mumbai: Moody's Ratings has downgraded ANI Technologies Pvt Ltd, the parent company of ride-hailing firm Ola, from ‘B3’ to ‘Caa1' and changed the outlook to negative. The downgrade is attributed to weakening financial performance, reduced liquidity, and an increased risk of violating loan covenants.
The global credit rating agency reported a decline in operating cash flows and an increase in refinancing risks due to slower revenue growth and ongoing losses. "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 release said.
Moody’s reported that ongoing operational challenges led to a higher-than-expected cash burn in the six months ending September 30, 2025, decreasing cash reserves from $90 million in March 2025 and limiting headroom under the term-loan covenant. "A covenant breach constitutes an event of default and accelerates repayment of Ola's $65 million loan due December 2026.
Ola must maintain cash equal to 40 per cent of the outstanding loan, at least $26 million, to comply with the covenant," the release added. Intense competition in India's ride-hailing sector will result in continued cash burn over the next 12 months. As such, the company will have to rely on external funding sources to refinance its upcoming loan maturity, the ratings agency said.
The ratings firm has deemed Ola's liquidity weak, indicating that available cash may fall substantially short of covering upcoming debt maturities and capital spending needs through December 2026. Moody’s said that Ola is considering options such as a potential initial public offering and selling its 3.64 percent stake in Ola Electric Mobility Ltd, valued at approximately $90 million.
However, it warned that these plans are subject to execution and market risks. Bhavish Aggarwal-run Ola Electric Mobility Ltd reported a consolidated net loss of Rs 418 crore for the July-September period (Q2 FY26), its exchange filing said this week. Revenue from operations dropped 43 per cent year-on-year to Rs 690 crore in Q2 FY26, down from Rs 1,214 crore in Q2 FY25, indicating a substantial decline in sales for the quarter.
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