In a significant stride towards indigenization and advancement in automotive technology, Ola Electric, led by Bhavish Aggarwal, has successfully secured the PLI-Automotive Certificate from the International Centre for Automotive Technology (ICAT). The certification is a testament to Ola Electric’s commitment to domestic value addition, propelling the two-wheeler giant into a new era of growth.
ICAT, a renowned automotive testing agency, affirmed that Ola Electric’s Battery Electric Vehicle – 2W (Ola S1 Pro Gen2) has met the minimum criteria of 50% domestic value addition for the Automotive PLI certificate. This achievement positions Ola Electric to benefit from incentives under the production-linked incentive (PLI) scheme, effective from the certificate’s issuance date, according to a senior Ola Electric official.
The PLI scheme, designed for the automobile and auto component industry, offers Ola Electric the opportunity to receive incentives for five consecutive financial years from FY24. The incentives, ranging between 13% and 18% of the determined sales value, serve as a catalyst for the company’s continued growth and innovation in the electric vehicle space.
This recent accomplishment follows Ola Electric’s prior certification for its second product under the PLI scheme, emphasizing the company’s commitment to meeting and exceeding localization standards set by nodal testing agencies like ICAT.
As Ola Electric gears up for its initial public offering (IPO), the company’s eligibility for incentives under the ACC PLI scheme over the next five years adds another layer of financial strength. The IPO, set to raise INR 7,250 Cr, includes a fresh issue of INR 5,500 Cr and an offer-for-sale (OFS) component of INR 1,750 Cr. Major stakeholders, including Bhavish Aggarwal and investors like Softbank, Temasek, Tiger Global, and others, are expected to participate in the OFS.
The proceeds from the IPO’s fresh issue will contribute to the Ola Gigafactory project, research and product development, organic growth initiatives, and general corporate purposes. Notably, the funds will also be allocated towards the repayment or prepayment of indebtedness incurred by Ola Electric Technologies, the company’s subsidiary.
Despite reporting losses of INR 1,472 Cr in the fiscal year ending March 2023, Ola Electric witnessed remarkable revenue growth, surging over 7 times year-over-year to INR 2,630 Cr. The financial performance highlights the company’s strategic positioning and aggressive expansion plans in the competitive electric vehicle market.
As Ola Electric continues to navigate the IPO landscape and positions itself as a key player in the electric vehicle sector, the PLI-Automotive Certificate from ICAT serves as a crucial milestone, unlocking a new phase of growth and development.
