Strategic Investment Bolsters Company’s Financial Position Pre-IPO
Ola Electric, the electric vehicle (EV) arm of Ola, has announced a significant boost to its financial standing with a $50 million debt funding secured from EvolutionX Debt Capital, a debt financing platform, according to media reports.
The funding was raised through the issuance of 41,000 non-convertible debentures (NCDs) at an issue price of Rs 1 lakh each, as per reports citing the company’s Registrar of Companies (RoC) filings.
This development follows Ola Electric’s previous fundraising efforts, wherein in October last year, it amassed Rs 3,200 crore in equity and debt funding from investors such as Temasek and SBI. These funds were earmarked for the company’s expansion initiatives and the establishment of its EV business, including the construction of a lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu.
The recent injection of capital comes at a crucial juncture for Ola Electric as it prepares for its much-anticipated Initial Public Offering (IPO). According to its draft red herring prospectus (DRHP), the company aims to raise $660 million through its IPO, including a proposed offer for the sale of 95.2 million equity shares at a face value of Rs 10.
In line with its growth strategy outlined in the DRHP filing, Ola Electric plans to allocate Rs 1,600 crore towards Research and Development (R&D) endeavors. Additionally, its subsidiary, Ola Cell Technologies, is slated to utilize Rs 1,226.4 crore for the construction of the Ola Gigafactory project.
While Ola Electric celebrates its latest financial milestone, the broader startup ecosystem faces challenges in fundraising, as indicated by YourStory Research. Venture capital funding at the close of the first quarter of 2024 witnessed a 22% decline compared to the previous year.
According to YourStory Research data, Indian startups secured a total of $2.5 billion in VC funding in the first quarter of 2024, marking a decrease from the $3.2 billion raised in Q1 2023.
