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Ola Electric, the prominent electric vehicle maker, has received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO), aiming to raise Rs 7,250 crore. The company had filed its draft red herring prospectus (DRHP) on December 22, 2023, marking a significant milestone as the first-ever Indian EV two-wheeler maker to file for an IPO.
Ola Electric has appointed Kotak Mahindra Capital and Goldman Sachs to manage its IPO, targeting an early 2024 launch. The IPO funds will significantly bolster the company’s efforts in capex, debt repayment, and R&D, ensuring sustained growth and innovation in the EV sector.
Key highlights of Ola electric’s IPO:
- IPO Structure: The IPO consists of a fresh issue worth Rs 5,500 crore and an offer for sale (OFS) amounting to Rs 1,750 crore. Existing shareholders are set to sell 95.19 million shares through the OFS.
- Major Shareholders: Founder Bhavish Aggarwal will be offloading 47.3 million shares, while initial investors such as AlphaWave, Alpine, DIG Investment, Matrix, and others will sell 47.89 million shares collectively.
- Pre-IPO Placement: Ola Electric is also considering a pre-IPO placement of shares worth Rs 1,100 crore, which would reduce the fresh issue size accordingly.
Utilization of IPO funds:
- Capital Expenditure (Capex): Rs 1,226 crore
- Debt Repayment: Rs 800 crore
- Research and Development (R&D): Rs 1,600 crore
- Inorganic Growth: Rs 350 crore
Market position and financial performance:
- Market Share: Ola Electric dominates the EV two-wheeler market with a 52% share, registering 34,000 units in the latest month, showcasing a 54% year-on-year growth.
- Revenue Growth: The company reported consolidated revenues of Rs 2,782 crore for the fiscal year ending March 2023, a staggering 510% increase, despite a net loss of Rs 1,472 crore due to rising expenses.
- Quarterly Performance: For Q1 2023-24, the company reported a total income of Rs 1,272 crore and a net loss of Rs 267 crore, with a net worth of Rs 2,111 crore as of June 30, 2023.
Ola Electric’s IPO approval from SEBI marks a pivotal moment in the Indian EV industry’s evolution. With robust financial performance and a strategic focus on growth and innovation, Ola Electric is poised to continue its market leadership and drive the future of electric mobility in India.