Ola Electric’s Upcoming ₹ 5500 Crore IPO Gets SEBI’s Approval

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On 11 June 2024, the Securities and Exchange Board of India (SEBI) approved the initial public offering (IPO) of Ola Electric. Ola Electric is coming up with its ₹ 5500 crore IPO, which will be one of the biggest IPO of the season as well as in the EV space. As per SEBI’s announcement, the listing of Ola Electric will be done by next month that is July 2024. 

Ola Electric filed its DRHP in December 2023, for the IPO through which it proposed to raise capital via a fresh issue of equity shares cumulating up to ₹ 5500 crore and also for an offer for sale (OFS) of shares up to 9.52 crore. Out of this OFS, the promoter of Ola Electric, Bhavish Aggarwal will sell off 4.7 crore shares which is around half of the OFS total shares proposed. 

One of the important facts to consider here is that the company has already exercised its option of raising ₹ 1000 crore through pre-IPO placement and thus, this amount will be reduced from its fresh issue of share’s ₹ 5500 crore IPO amount. 

About Ola Electric

Ola Electric has become a known name in the EV industry in India. The company is engaged in manufacturing technology and parts required to build Electric vehicles. The main products of the company range from battery packs to vehicle frames, to motors, and other similar parts. Ola Electric mainly operates in the two-wheeler segment of the electric vehicle industry. In the year 2023, the company recorded the highest sales in the segment across the country. 

Market Dynamics and Opportunities 

India currently ranks at 2nd position when it comes to demand and sale of two-wheelers and the 3rd largest in the four-wheeler segment that too only by domestic sales. For two-wheelers, the total approachable domestic market is expected to be between ₹ 7.2 trillion to ₹ 8 trillion. Out of this market demand, 41-56% is expected to be met by electric two-wheelers by FY28. In the global market, the demand for electro two-wheeler OEMs is super high with around export opportunity of 100-110 million units across the globe. 

Ola Electric Financial and Business Performance

For people interested in Ola Electric ipo, knowing the company’s performance is necessary. Ola Electric’s revenue from operations went up from a mere ₹ 8.64 million in FY21 to a whopping ₹ 26309.27 million in FY23. Even in the first three months of FY24, the company recorded revenue worth ₹ 12427.46 million which has been another surge. The sales of Ola Electric skyrocketed from FY23 after it launched multiple models of its electric two-wheelers. 

Having said that, the company’s loss also increased over this period. While it was in a loss of ₹ 1992.32 million in FY21, the amount of loss rose to ₹ 14720.79 million in FY23. During the first three months of FY24, it incurred a loss of ₹ 2671.56 million. The loss can be attributed mainly to the cost of raw materials required for manufacturing and production of the products and vehicles. In addition, the debt of the company has increased to ₹ 1617 crore in FY24 from ₹ 39 crore in FY21. 

Ola Electric IPO Details and Purpose

Coming to the Ola Electric IPO details, as mentioned above, the company is expecting to raise ₹ 5500 crore from this IPO via fresh issue of shares which is the Ola electric ipo valuation. Out of which it intends to use ₹ 1264 crore for capital expenditure to expand its gigafactory. Ola Electric proposes to use another ₹ 800 crore from the IPO proceeds to pay off its debts. It also intends to use ₹ 350 crore of the proceeds to invest in the organic growth of the company. Finally, the major chunk of ₹ 1600 crore will be used for research and development purposes for the next three years. 

Source: https://www.cnbctv18.com


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