Ola Electric, the electric vehicle startup founded by Bhavish Aggarwal, has secured approval from the Securities and Exchange Board of India (Sebi) for its Rs 7,250 crore initial public offering (IPO). With Sebi’s green light, Ola Electric is poised to become India’s first EV company to enter the public market.
The IPO will comprise a fresh issue of equity shares totaling Rs 5,500 crore, alongside an offer for sale (OFS) of over 95 million equity shares, valued at approximately Rs 1,750 crore. Bhavish Aggarwal plans to sell up to 3.48 per cent stake in the IPO, equivalent to 47.4 million shares. Other selling shareholders include prominent names like Indus Trust, Alpine Opportunity Fund, and SoftBank Vision Fund.
This IPO marks a significant milestone as it represents the first entry of a two-wheeler manufacturer into the public market in decades. Additionally, it signifies Aggarwal’s inaugural venture into taking a company public. Ola Electric is eyeing a valuation range of $7-8 billion.
Since its inception into the EV sector in 2017, Ola Electric has emerged as a dominant force, capturing over 35 per cent of the market share in FY24. Data indicates a substantial increase from 21 per cent in FY23, as reported by the VAHAN portal.
According to the draft red herring prospectus (DRHP), the proceeds from the IPO will be allocated towards capital expenditure (capex), debt repayment, and research and development (R&D). Notably, the firm plans to invest Rs 1,226 crore in capex and allocate Rs 800 crore for debt repayment. Additionally, it intends to spend Rs 1,600 crore on R&D and Rs 350 crore on organic growth initiatives.
In terms of financial performance, Ola Electric witnessed a remarkable 510 per cent increase in total revenue, reaching Rs 2,782 crore in FY23 from Rs 456 crore in FY22. However, the SoftBank-backed company did not disclose its net loss figure. Reports indicate a doubling of net loss to approximately Rs 1,472 crore in FY23, with an Ebitda loss of Rs 1,318 crore.
The IPO, backed by Sebi approval and a robust market sentiment, is anticipated to launch soon, subject to further regulatory processes and market conditions.
