Image Source: autocarindia.com
Ola Electric is preparing to launch its initial public offering (IPO), with the subscription period scheduled from August 2 to August 6. The company has set the price band for its shares between Rs 72 and Rs 76 each. If the upper limit is reached, the IPO could raise up to Rs 6,145.56 crore, including Rs 5,500 crore from new shares and Rs 645.56 crore from an offer for sale.
The IPO allocation includes up to 10 percent for retail individual investors, 75 percent for qualified institutional buyers, and 15 percent for non-institutional buyers. Investors can bid for a minimum of 197 shares and in multiples of 197 shares thereafter.
Bhavish Aggarwal, CEO of Ola Electric, is the company’s largest shareholder with a 36.9 percent stake. Following him is SoftBank’s SVF II Ostrich (DE) LLC, holding 22 percent. Aggarwal and the promoter group Indus Trust plan to sell up to 3,79,15,211 shares and 41,78,996 shares, respectively, while SVF II will offer 2,38,57,268 shares, as outlined in the Draft Red Herring Prospectus (DRHP).
Ola Electric leads the electric two-wheeler market in India with over a 35 percent market share, competing against major players like Bajaj Auto, TVS Motor, Ather, and Hero MotoCorp. The company received regulatory approval for the IPO last month and plans to allocate Rs 1,226.43 crore from the proceeds to its cell manufacturing facility at the upcoming Giga factory in Krishnagiri, Tamil Nadu. An additional Rs 1,600 crore will be invested in research and product development, and Rs 800 crore will be used to repay debt.
For FY23, Ola Electric reported a consolidated net loss of Rs 1,472.08 crore, with potential for continued losses due to higher operating expenses related to product and sales expansion. As of October 31, 2023, the company’s total outstanding borrowings were Rs 1,768.82 crore.
Despite some fluctuations in demand and subsidy challenges, Bhavish Aggarwal noted that the EV sector in India is still in its early stages. He highlighted that EV penetration, especially in the scooter segment, has risen to nearly 15 percent since the company launched its product three years ago. Aggarwal acknowledged potential cyclical ups and downs but remains optimistic about the sector’s long-term growth.
