Ola Electric was selected for the government’s ambitious Rs 18,100-crore production-linked incentive scheme for advanced chemistry cell storage manufacturing. The company was awarded a capacity of 20 GWh under the scheme.
22 Dec 2023 | 7166 Views | By Kiran Murali
Ola Electric Mobility Ltd expects to start operations at its Giga factory in Tamil Nadu by March 2024. The IPO-bound Ola Electric Mobility plans to use Rs 1,226 crore from its public issue to expand the lithium-ion cell manufacturing capacity at the factory in its later stages.
Ola Electric was selected for the government’s ambitious Rs 18,100-crore production-linked incentive scheme for advanced chemistry cell storage manufacturing. The company was awarded a capacity of 20 GWh under the scheme.
The construction of the facility, under subsidiary OCT, started in June, and its location is within proximity to Ola Futurefactory, where the company’s electric two-wheelers and certain components are being manufactured.
“We believe that in developing our in-house cell manufacturing capabilities, we will be able to gain greater control over the quality, supply and cost of our batteries and EVs,” Ola Electric said in its DRHP.
The company expects to commence operations of the Giga factory in Krishnagiri, Tamil Nadu, with a cumulative capacity of 1.4 GWh and expand it to 5 GWh by October. The first phase is being funded from internal accruals and long-term borrowings availed by OCT.
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 company had said it would use the funds for business expansion, including the Krishnagiri facility.
The cumulative capacity at the Giga factory will be further expanded in the second phase to 6.4 GWh by April 2025 and to 20 GWh by June 2026 in further phases. From the IPO proceeds, the company will use Rs 1,226 crore for the capital expenditure incurred in expanding the capacity in the second phase.
The Bengaluru-based company has filed a draft red herring prospectus (DRHP) with SEBI for an IPO, through which the company looks to raise Rs 5,500 crore by issuing fresh equity. The public issue also includes an offer for sale by existing promoters and investors, including founder Bhavish Aggarwal, of 95,191,195 shares.