Ola Electric ₹5,500 Crore IPO Set for Launch in August

Ola Electric, a leading player in India’s electric scooter market, is set to launch its ₹5,500 crore initial public offering (IPO) for retail investors on August 2.

The issue will remain open until August 6. This marks a significant event for the company as it seeks to expand its financial base and strategic initiatives.

Valuation and Share Offering by Ola Electric:

The IPO will value Ola Electric between $4.2 billion to $4.4 billion, representing an 18.5-22% decrease from its last funding round in September, led by Singapore-based investment firm Temasek.

Founder and CEO Bhavish Aggarwal will sell 37.9 million shares, a 20% reduction from the amount estimated in the draft prospectus. The decision to offer the IPO at a lower valuation aims to encourage higher participation from investors.

Use of Proceeds:

According to the Draft Red Herring Prospectus (DRHP) filed in December 2023, the IPO’s proceeds will be used for capital expenditures (capex), debt repayment, and research and development (R&D).

Despite being loss-making, Ola Electric holds a 46% market share in the electric scooter segment, a significant position amidst competition from companies like Ather Energy, TVS Motors, and Bajaj Auto.

Key Dates and Facilitators of Ola Electric IPO:

The anchor book for the IPO will open on August 1, with the company’s listing expected on August 9. Several prominent investment banks are facilitating the deal, including Kotak Mahindra Capital, Axis Capital, Goldman Sachs, ICICI Securities, Citi, BofA Securities, SBI Caps, and BoB Caps. The law firm Cyril Amarchand Mangaldas is serving as company counsel for the IPO.

Ola Electric’s IPO represents a crucial step in the company’s growth strategy, allowing it to bolster its financial resources and invest in future innovations and market expansion.