India’s Ola Electric plans to raise $661.8 million through an initial public offering by issuing new shares, as per the latest updates filed with the country’s market regulator. This move comes in the wake of Ola Electric securing $384 million in funding from Temasek and State Bank of India in late October. The startup, valued at $5.4 billion in the last financing, now targets valuation between $6.5 billion to $8 billion for the IPO. The filing includes plans to sell around 95.2 million shares from existing investors, including founder Bhavish Aggarwal, Alpha Wave Ventures, Tiger Global, Matrix Partners, and SoftBank. The book for the IPO will be managed by Kotak, Citi, Bank of America, Goldman Sachs, Axis, ICICI, SBI, and BOB Capital.
Ola Electric aims to utilize $150 million of the IPO proceeds to expand the manufacturing capacity of its electric vehicle cell factory to 6.4 gigawatt hours from 5, and for large-scale EV expansion into cars, batteries, and cells in India. The company plans to produce its own two-wheelers, cars, and lithium cells. The startup’s emergence from the ride-hailing giant Ola in 2019 has been highly operational. However, its losses in the fiscal year 2023 were reportedly at $176 million. Major risk factors include government incentives to local electric vehicle makers and the possibility of experiencing key managerial changes, with an attrition rate of 42.06% and 47.48% in the seven-month period ending October 31, 2023.
Despite its challenges, Ola Electric has managed to become the leader in the EV scooter market in India, with a 35% market share, especially after launching new lower-priced variants of its flagship S1 electric scooter model and an upgraded version. The IPO becomes the first by a two-wheeler maker in India in over 15 years. The company lists Bhavish Aggarwal as its Founder, Chairman, and Managing Director, who has a significant influence on its business plan.
Additionally, Ola Electric has several transactions with ANI Technologies Private Limited and its subsidiaries, with whom they share various resources, including their Corporate Office and Registered Office. The startup also has arrangements with ANI for sales and advertisements of their EVs, distribution of insurance policies, and services provided by ANI’s subsidiaries. The IPO aims to raise capital to expand and meet the growing demands in the electric vehicle sector in India.
With the current IPO plans and the massive funding received, Ola Electric is gearing up to step into a new era, transforming the electric vehicle industry in India.
