Ola Electric files papers for IPO; Looks to raise Rs 5,500 crore via fresh issue

After months of hiatus, Ola Electric Mobility Ltd - India’s top electric two-wheeler maker - has finally filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). 

Ola Electric’s IPO is a combination of a fresh issue and an offer for sale. The company plans to issue shares worth Rs 5,500 crore, while its existing investors, including founder Bhavish Aggarwal, will sell 95,191,195 shares. 

Currently, Aggarwal is the largest shareholder in the company with a stake of 36.9%, followed by SoftBank’s SVF II Ostrich (DE) LLC with a 22% stake. Aggarwal plans to offload 47,394,014 shares in the public issue while SVF II will sell 23,857,268 shares, according to the DRHP. 

Of the net proceeds from the fresh issue, Ola Electric said it would use Rs 1,226.43 crore for expansion of cell manufacturing capacity at its upcoming Giga factory in Tamil Nadu, Rs 1,600 crore for research and product development and Rs 800 crore for debt repayment. 

The company’s total outstanding borrowing on a consolidated basis stood at Rs 1,768.82 crore, as of October 31, 2023. “Except for the outstanding borrowings of our material subsidiary and our subsidiary Ola Cell Technologies, there are no outstanding borrowings of our company or any of our subsidiaries,” Ola Electric said. The company has 10 subsidiaries and has no joint venture operations. 

Ola Electric’s issue marks the first public offering by an electric vehicle maker and the first by an automaker in the last 20 years. 

Bengaluru-based Ola Electric introduced its first electric scooter in 2021, The company currently manufactures electric vehicles, and components such as battery packs, motors and vehicle frames. It sources cells from third-party suppliers and is developing cell technologies and cell manufacturing processes  

Ola Electric’s current electric scooter line-up includes three models and remains the dominant player in the country's electric two-wheeler market a market share of over 30%. The company sold a total of 156,261 electric two-wheelers in 2022-2023 while it has sold over 253,000 units in the calendar year 2023.  

The company operates a direct-to-customer omnichannel distribution network comprising 935 experience centres and 414 service centres. 

In October, the Bengaluru-based company raised Rs 3,200 crore through a mix of equity and debt from Temasek-led investors and the State Bank of India. The funds would be used for expanding its business and setting up a lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu. 

For the financial year 2022-2023, the company reported a consolidated net loss of Rs 1,472.08 crore. Revenue from operations during the period came in at Rs 2,630.93 crore.