📷 Image Credits: Moneycontrol
Ola Electric, the electric vehicle maker, has been granted approval by the Securities and Exchange Board of India (Sebi) for its upcoming initial public offering (IPO) to raise Rs 7,250 crore. The firm filed its draft red herring prospectus (DRHP) with Sebi on December 22, 2023, marking a significant milestone in its journey towards going public. The IPO will consist of a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totaling Rs 7,250 crore. Existing shareholders are expected to sell 95.19 million shares in the OFS, with founder Bhavish Aggarwal planning to sell 47.3 million shares, while initial investors will collectively sell 47.89 million shares.
The funds raised through the IPO will be utilized by Ola Electric for various purposes, including capex, debt repayment, and research and development (R&D). The firm is set to allocate approximately Rs 1,226 crore for capex, Rs 800 crore for debt repayment, Rs 1,600 crore for R&D, and Rs 350 crore for inorganic growth. Additionally, Ola Electric aims to establish the Ola Gigafactory initiative with a focus on battery production for electric vehicles and other related components.
With a dominant presence in the EV two-wheeler market, Ola Electric commands around 52% market share. The company’s performance reflects its strong growth trajectory, as evidenced by the registration of 34,000 units in a recent month, marking a 54% year-on-year growth. Despite reporting consolidated revenues of Rs 2,782 crore for the fiscal year 2022-23, the firm also witnessed an increase in net losses to Rs 1,472 crore due to escalated expenses.
The approval from Sebi comes at a crucial time for Ola Electric, aligning with the firm’s strategic goals of expansion and innovation in the electric mobility space. As Ola Electric prepares to enter the public market, the investment community will be closely watching the developments, anticipating the impact of the IPO on the company’s growth trajectory and overall market dynamics.
