BANGALORE — The Competition Commission of India, an antitrust watchdog, has thrown into disarray a plan by South Korean automaker Hyundai and its affiliate Kia Motor to invest $300 million in ride-hailing unicorn Ola.
In response to an application sent by the three companies seeking approval, the regulator asked Ola’s parent ANI Technologies to outline the impact on competition of car companies investing in ride-hailing apps.
Ola failed to submit its findings on time, which resulted in the commission deeming the proposal invalid. Bengaluru-based Ola refiled its application early in September, clarifying that the initial plan of pumping $300 million into ANI Technologies was now changed. Under the new plan, $250 million will be invested in Ola and the remaining into Ola Electric, a unit focused on electric vehicles.
“[The commission] thought that the deal might create a monopolistic situation for one carmaker in the cab-hailing market,” a source was quoted as saying on Moneycontrol, a financial news website.
In its second application for approval, Ola expanded on the competitive landscape in India, touching on market size, passenger car sales in India, operational leasing services, radio taxi services, and charging infrastructure services for electric vehicles. According to the Moneycontrol piece, Ola’s second attempt might also fail.
Ola formed a partnership with Hyundai and Kia Motors in March under which the automakers would build electric vehicles for the Indian market only and the infrastructure around those.
Ola co-founder Bhavish Aggarwal owns a stake of about 40% in Ola Electric, making him the biggest shareholder. The remaining is divided between investors like SoftBank Group, Tiger Global, Tencent Holdings and Matrix Partners. Nine-year-old Ola is valued at over $6 billion.
Meanwhile, Hyundai launched its Kona electric SUV car in July 2019 in India and is now working on a prototype of a smaller electric car. Kia Motors is also planning a fleet of electric vehicles tailored to the Indian market.
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