Ola Electric seeks to raise 5,500 crore through the IPO: Bhavish Aggarwal to sell 4.73 crore shares

Ola Electric Mobility Pvt., founded by Bhavish Aggarwal, has made a significant move by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). This development positions Ola Electric as the first electric vehicle (EV) company to go public in India, marking a historic moment in the country’s automotive landscape.

The IPO comprises a dual offering, featuring fresh shares and an offer for sale. The fresh issue component is valued at Rs 5,500 crore, and the offer for sale involves 9.52 crore shares, as indicated in the DRHP. Bhavish Aggarwal is set to offload up to 4.73 crore shares in the offer for sale, joined by other selling shareholders such as Tiger Global and SoftBank.

The filing of the IPO by Ola Electric is a groundbreaking move, making it the first IPO by an auto company in the last two decades. Additionally, it positions Ola Electric as the first pure-play EV company to be listed on Indian stock exchanges. The company underwent a notable transformation in November, transitioning from a private firm to a public company.

Ola Electric’s financials reveal substantial growth, with revenue surging nearly sevenfold in FY23 to Rs 2,630.9 crore, compared to Rs 373.4 crore in the previous fiscal year. However, this growth was accompanied by a loss of Rs 1,472 crore in FY23, up from a loss of Rs 784.1 crore in FY22.

The IPO proceeds are earmarked for various strategic initiatives, including capital expenditure on the cell factory, the Gigafactory project, debt repayment, investment in research and product development, and other growth initiatives. The DRHP also outlines the consideration of pre-IPO placement for an amount aggregating up to Rs 1,100 crore.

Ola Electric has emerged as a market leader in the battery-powered scooter segment, commanding a significant 35% market share as of November. The company achieved a milestone with its highest-ever monthly sales of nearly 30,000 units during that month. Despite the success, the company faces challenges as it readjusts sales goals for 2023-2025 and delays profit targets due to reduced government incentives affecting e-scooter prices.

As Ola Electric takes the bold step toward an IPO, it reflects the dynamic shifts in the Indian automotive sector, particularly in the electric vehicle space. The IPO is a testament to Ola Electric’s commitment to driving sustainable mobility and contributing to the country’s electric revolution. The move is closely watched as Ola Electric continues to play a pivotal role in shaping the future of mobility in India.