Why Rapido's founders have given up their 'promoter' status?
What's the story
The three co-founders of ride-hailing platform Rapido: Aravind Sanka, Pavan Guntupalli and Rishikesh S R, have given up their promoter tags. The company's board approved the move, according to a regulatory filing reviewed by Mint. The reclassification is part of the company's preparations for its initial public offering (IPO) in FY27. An investor aware of the company's plans said that "the company will soon start its IPO process and hire bankers."
Market strategy
Growing trend among new-age companies
Rapido's decision to reclassify its founders as non-promoters follows a growing trend among new-age companies. This strategy is aimed at easing compliance burdens after listing, with benefits such as favorable board compositions and easier approval for compensation. Other companies that have taken this step include Swiggy, Zomato's parent Eternal, FirstCry's parent BrainBees Solutions, Delhivery, PolicyBazaar's parent PB Fintech, and soon-to-be-listed Aye Finance.
Board decision
Board approval and key factors for reclassification
The board of Roppen Transport Services Private Ltd, which operates Rapido, approved the reclassification on August 20, 2025. The decision was based on three factors: none of the co-founders held more than 10% of the company's total voting rights, they did not have control over its affairs, and they had no special rights via formal or informal arrangements. Sanka continues to serve as CEO of Rapido.
Corporate governance
Impact on board composition and chairperson requirements
When founders turn non-promoters, it affects the composition of the company's board and how their compensation is determined. If a non-promoter, non-executive director is chairperson, only one-third of the board has to be independent directors. However, if a promoter or executive is chairperson, half of the directors must be independent. This was explained by Gaurav Pingle, a company secretary based in Pune.
Financial flexibility
Key differences in promoter and non-promoter requirements
As promoters, compensation of the founders would need to be ratified by the minority shareholders, bringing additional scrutiny and uncertainty. However, as non-promoters, there is no mandatory requirement of obtaining shareholder approval for remuneration payment to a non-promoter executive director. Pingle said that the promoters have to disclose details of shares encumbered or pledged by them which is not applicable to non-promoters.
Growth trajectory
Rapido's journey to unicorn status
Founded in November 2015, Rapido became a unicorn in 2024 after raising money in a Series E funding round led by WestBridge Capital at a valuation of $1.1 billion. The Bengaluru-based company plans to use the capital infusion to expand operations across India and scale up its technology platform for better service delivery. It also wants to widen operations across all categories including bike taxis, three-wheelers, and taxicabs.