Ola Electric has received approval from the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO) to raise Rs 7,250 crore. This landmark move makes Ola Electric the first Indian EV two-wheeler manufacturer to file for an IPO.
The firm filed its draft red herring prospectus (DRHP) with Sebi on December 22, 2023. The IPO will consist of a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totaling Rs 7,250 crore. Existing shareholders plan to sell 95.19 million shares in the OFS, according to the DRHP. Founder Bhavish Aggarwal will be selling 47.3 million shares, while initial investors, including AlphaWave, Alpine, DIG Investment, and Matrix, will collectively sell 47.89 million shares.
Additionally, Ola Electric is considering a pre-IPO placement of shares worth Rs 1,100 crore, which would reduce the size of the fresh issue accordingly.
Ola Electric aims to utilize the IPO proceeds for capital expenditure (capex), debt repayment, and research and development (R&D). Specifically, the firm plans to allocate Rs 1,226 crore for capex, Rs 800 crore for debt repayment, Rs 1,600 crore for R&D, and Rs 350 crore for inorganic growth initiatives.
This approval comes amid reports that Ola Cabs, the company’s ride-hailing arm, has begun preliminary discussions with investment banks for its own potential IPO.
Ola Electric currently leads the EV two-wheeler market in India with a 52% market share. According to the Government’s VAHAN website, the company registered 34,000 units in the last month, representing a 54% year-on-year growth.
Financially, Ola Electric has demonstrated robust revenue growth, reporting consolidated revenues of Rs 2,782 crore for the financial year ended March 2023, marking a 510% increase. However, its net loss widened to Rs 1,472 crore due to higher expenses. For Q1 2023-24, the company reported a total income of Rs 1,272 crore and a net loss of Rs 267 crore. As of June 30, 2023, Ola Electric’s net worth stood at Rs 2,111 crore.
Ola Electric’s journey from a startup to a market leader in the EV space and now to a potential public company is a testament to the growing importance of sustainable transportation in India. The approval from Sebi marks a significant milestone in the company’s mission to revolutionize the EV industry.
