In a strategic move gearing up for its impending Initial Public Offering (IPO), electric vehicle (EV) manufacturer Ola Electric has finalized a debt infusion of INR 100 Cr (approximately $12 Mn) from Alteria Capital, a prominent venture debt fund.
Debt Investment Details and Regulatory Filings
According to regulatory filings with the Registrar of Companies, Ola Electric’s board has greenlit the issuance of 10,000 non-convertible debentures (NCDs) valued at INR 1 Lakh each to Alteria Capital. Of these, 6,000 NCDs are designated for Alteria Capital India Fund II, with the remaining 4,000 NCDs allocated to Alteria Capital India Fund III.
The filing articulates the company’s intent to raise funds through the issuance of NCDs to Alteria Capital, aggregating up to INR 100 Cr. While the exact utilization of these funds remains undisclosed, the move underscores Ola Electric’s strategic financial maneuvering as it prepares for its IPO.
Previous Fundraising Endeavors and Financial Landscape
This debt infusion marks yet another milestone in Ola Electric’s fundraising journey. Earlier this year, the company secured INR 410 Cr in debt from EvolutionX Debt Capital. Notably, its fundraising efforts in the preceding year culminated in a $384 Mn funding round, comprising a blend of debt and equity, bringing its total funding to over $1.4 Bn.
IPO Progress and Financial Performance
In parallel to its fundraising activities, Ola Electric has received regulatory approval from the Securities and Exchange Board of India (SEBI) for its highly anticipated IPO. The IPO, outlined in its Draft Red Herring Prospectus (DRHP), comprises a fresh issue of shares valued at INR 5,500 Cr, alongside an Offer for Sale (OFS) component of up to 9.51 Cr shares.
Despite its significant market traction, evidenced by consistently leading in electric two-wheeler registrations, Ola Electric remains in a loss-making position. Its net loss surged by 88% year-on-year to INR 1,471.6 Cr in FY23, despite sales witnessing a remarkable surge of over 7X during the same period.
Operational Adjustments and Competitive Landscape
As it readies itself for the IPO debut, Ola Electric is strategically streamlining its operations. Recent reports suggest contemplation of a workforce downsizing by 400-500 employees, aimed at mitigating cash burn and reducing losses.
In the competitive realm of two-wheeler EVs, Ola Electric contends with formidable players such as Ather Energy, Bajaj, Hero, and TVS, amidst a landscape marked by evolving consumer preferences and regulatory dynamics.
