In a significant milestone for the Indian electric vehicle (EV) industry, Ola Electric has formally submitted a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). The proposed IPO comprises a fresh equity share release of up to INR 5,500 crore, coupled with an offer for sale (OFS) of 95,191,195 equity shares at a face value of INR 10.
Ola Electric, headquartered in Bengaluru, has rapidly emerged as the best-selling electric two-wheeler (E2W) player in India, a feat supported by E2W registrations on the VAHAN Portal of the Ministry of Road Transport and Highways. The company’s strategic plans include the development of an EV hub in the Krishnagiri and Dharmapuri districts in Tamil Nadu, featuring the Ola Futurefactory, the upcoming Ola Gigafactory, and co-located suppliers.
With its first electric vehicle model, the ‘S1 Pro,’ introduced in August 2021, Ola Electric now boasts a portfolio of five scooter models. The fiscal year 2023 witnessed a remarkable surge in revenue from operations, surpassing seven times the previous year’s figures, reaching Rs 2,630.93 crore. Notably, for the quarter ended June 30, 2023, revenue from operations reached Rs 1,242.75 crore.
Key Highlights of Ola Electric’s IPO:
- First Auto IPO in 20 Years: Ola Electric’s IPO marks a historic moment as the first IPO by any auto company in India in two decades. The last auto IPO was by Maruti Suzuki in 2003, making Ola Electric the first pure-play EV company to list on Indian bourses.
- Allocation Breakdown: The IPO allocation designates 75 percent for qualified institutional buyers (QIBs), up to 15 percent for non-institutional investors (NIIs), and a maximum of 10 percent for retail individual bidders.
- Stake Disinvestment: Founder Bhavish Aggarwal is set to sell around 47.4 million shares in Ola Electric. The company targets a valuation in the range of $7-8 billion by early 2024. Various entities, including Indus Trust, Kaha Wave Ventures, and others, are also divesting stakes in the IPO.
- Funds Deployment: Proceeds from the fresh issue will be allocated for Ola Cell Technologies’ Gigafactory project, research and development (R&D) investments, organic growth initiatives, general corporate purposes, and to repay/pre-pay debts of Ola Electric Technologies (OET).
- Book Managers: The book-running lead managers for the IPO include Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets, and BOB Capital Markets, with Link Intime India as the appointed registrar of the offer.
The filing of the IPO by Ola Electric underscores the company’s commitment to shaping the future of sustainable mobility and positions it as a key player in the rapidly evolving Indian EV landscape.
