- Founder Bhavish Aggarwal to divest 47.3m shares as part of the IPO, while initial investors including AlphaWave, Alpine, DIG Investment, and Matrix, among others, intend to sell 47.89m shares through the offer for sale.
Ola Electric, the prominent Indian e-scooter manufacturer, has gained approval from the Securities and Exchange Board of India (Sebi) to move forward with its substantial $660 million Initial Public Offering (IPO).
The development marks a significant milestone as it paves the way for the first-ever electric vehicle (EV) stock listing in India. Sources with direct insights have indicated that the company submitted its draft red herring prospectus (DRHP) to the regulatory authorities on December 22, 2023.
Backed by notable investors such as SoftBank and Temasek, Ola Electric had initiated the IPO process by filing the necessary documents with Sebi in December, with the aim of leveraging this opportunity to bolster its operational capacity and facilitate further expansion.
Mid-July listing
Ola Electric’s IPO comprisesd a fresh issue of Rs5,500 crore and an offer for sale (OFS) of Rs1,750 crore totalling Rs7,250 crore. Existing shareholders were said to sell 95.19 million shares in the OFS, as per the firm’s DRHP.
With plans to make its shares available for listing by mid-July, the company is set to engage with potential investors in the upcoming days to gauge interest for its offering.
Although Ola Electric had previously engaged with global investors through roadshows earlier in the year, it intends to revisit discussions to clarify terms and elaborate on its business strategy, as per sources familiar with the matter.
As a leading player in India’s burgeoning e-scooter market, Ola Electric faces competition from established brands like TVS Motor, Bajaj Auto, and Ather Energy. Noteworthy for its market presence and innovative offerings, the company attained a valuation of $5.4 billion in September 2023.
Proceeds from the IPO
The founder of Ola Electric, Bhavish Aggarwal, is anticipated to divest 47.3 million shares as part of the IPO, while initial investors including AlphaWave, Alpine, DIG Investment, and Matrix, among others, intend to sell 47.89 million shares through the offer for sale.
Outlined in the DRHP, the proceeds from the IPO will be allocated towards various strategic objectives, including capital expenditure, debt repayment, and research and development (R&D) initiatives.
Specifically, the company intends to allocate approximately Rs1,226 crore towards capex, Rs800 crore for debt repayment, Rs1,600 crore for R&D, and Rs350 crore for inorganic growth.
In its financial performance for the fiscal year ending in March 2023, Ola Electric disclosed consolidated revenues amounting to Rs2,782 crore, reflecting a substantial growth of nearly 510 percent.
However, the company experienced a widened net loss of Rs1,472 crore during this period, primarily attributed to escalated expenses. For the first quarter of the fiscal year 2023-24, Ola Electric posted a total income of Rs1,272 crore, alongside reported losses of Rs267 crore.
The company’s net worth as of June 30, 2023, stood at Rs2,111 crore, underscoring its financial standing in the market.
The forthcoming IPO of Ola Electric represents a significant milestone not only for the company itself but also for the Indian EV industry as a whole.
With ambitious growth plans, strategic utilisation of funds from the offering, and a strong market position, Ola Electric is poised for a transformative phase as it gears up towards its public listing and ventures into a new chapter of expansion and innovation in the EV sector.