Ola Electric files draft papers for IPO, to raise INR 5,500 cr via fresh issue

In a significant minutiae for the Indian electric mobility sector, Ola Electric has officially filed its typhoon red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), paving the way for an eagerly awaited initial public offering (IPO). The electric vehicle (EV) manufacturer is targeting to raise a substantial sum of INR 5,500 crore through a combination of fresh issue of shares and an offer-for-sale (OFS) component.

IPO Structure and Key Participants:

The IPO is structured with a fresh issue of INR 5,500 crore and an offer-for-sale (OFS) component of 95.2 million shares. Major investors, including Softbank, Temasek, Tiger Global, Alpha Wave, Tekne Capital, and Matrix Partners, are predictable to participate in the OFS. Notably, Ola Electric’s founder and CEO, Bhavish Agarwal, will be selling up to 47.4 million shares in the IPO.

The proceeds from the fresh issue are earmarked for strategic purposes, including wanted expenditure for the would-be Ola Gigafactory project, investments in research and product development, and fostering organic growth initiatives.

Ola Electric’s Financial Snapshot:

The IPO filing comes on the heels of Ola Electric disclosing a doubled net loss of INR 1,472 crore in the fiscal year 2022-23. However, the visitor moreover reported an impressive surge in consolidated revenue, exceeding six-fold from the previous year, reaching INR 2,782 crore in the same fiscal year.

In the EV market, Ola Electric made headlines by selling 30,000 electric vehicles (EVs) in the last month. Although this icon falls short of the older goal reported by Reuters in July, which projected sales of 882,000 EVs, Ola Electric is optimistic well-nigh achieving 300,000 e-scooter sales by the end of the ongoing fiscal year in March 2024.

Ola Electric’s current product lineup includes three scooter models:

Ola SIX, S1 Pro, and the S1 Air.

Utilization of IPO Proceeds:

Ola Electric plans to intrust over INR 1,200 crore from the fresh issue towards the wanted expenditure of its subsidiary, Ola Lamina Private Technologies. This investment aims to expand the lamina manufacturing topics of the Ola Gigafactory from 5.0 GWh to 6.4 GWh. The visitor believes that developing in-house lamina manufacturing capabilities will provide greater tenancy over the quality, supply, and forfeit of batteries and EVs.

Additionally, Ola Electric will utilize INR 800 crore from the IPO proceeds to repay outstanding debt of flipside subsidiary, Ola Electric Technologies Ltd (OET). As of October, OET had outstanding borrowings amounting to INR 860 crore on a consolidated basis.Research and product minutiae will receive a significant share of the IPO proceeds, with INR 1,600 crore allocated to remoter enhance Ola Electric’s capabilities. The visitor has once delivered four products and spoken six new product launches since August 2021.

Furthermore, Ola Electric plans to waterworks INR 350 crore towards funding organic growth opportunities, including investments in its subsidiary OET for the payment of rental expenses, expansion of existing wits centers, and the extension of the network of hypercharger stations.

Market Dynamics and Industry Significance:

This IPO marks a historic moment as the first by an automaker in India in over two decades. The last IPO in the automobile sector occurred in 2003 when Maruti Suzuki (then Maruti Udyog) went public. The timing of Ola Electric’s IPO coincides with a bullish probity market, with several companies leveraging the rally to raise funds. In December alone, 11 mainboard companies raised or spoken raising INR 8,400 crore through IPOs, while five secured INR 11,400 crore through QIPs.

Kotak Mahindra Capital, BofA Securities, Axis Capital, SBI Wanted Markets, Citigroup Global Markets, Goldman Sachs, ICICI Securities, and BOB Wanted Markets have been scheduled as the typesetting running lead managers to oversee the IPO process.

Final Point:

Ola Electric’s IPO is poised to be a landmark event in the Indian electric mobility landscape, reflecting the growing investor interest in sustainable and innovative transportation solutions. As the visitor charts its undertow towards a public listing, industry observers and investors will keenly watch the developments, anticipating the impact on the EV sector and the broader Indian automotive market.

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