Ola Electric is set to open its shares for public issue, with subscriptions opening on August 2 and closing on August 6. The company has fixed the price band for its upcoming initial public offering (IPO) between Rs 72 to Rs 76 per share. At the upper end of this range, the issue could raise Rs 6,145.56 crore, comprising Rs 5,500 crore from new shares and Rs 645.56 crore from an offer for sale.
- CEO Bhavish Aggarwal is currently the largest shareholder
- Ola Electric is the market leader in EV sales
- Rs 800 crore from fresh issue will be used for debt repayment
Up to 10 percent of the issue will be available for retail individual bidders, while 75 percent is reserved for qualified institutional buyers and 15 percent for non-institutional buyers. Investors can bid for a minimum of 197 equity shares and in multiples of 197 equity shares after that.
Currently, Bhavish Aggarwal, CEO of Ola Electric, is the largest shareholder in the company with a stake of 36.9 percent, followed by SoftBank’s SVF II Ostrich (DE) LLC with 22 percent. Aggarwal and promoter group Indus Trust plan to offload up to 3,79,15,211 crore shares and 41,78,996 shares, respectively. SVF II will sell 2,38,57,268 shares, according to the DRHP.
Ola Electric is the market leader in the electric two-wheeler segment with over 35 percent market share, competing with Bajaj Auto, TVS Motor, Ather and Hero MotoCorp. The automaker secured regulatory approval for the IPO last month and plans to use Rs 1,226.43 crore from its net proceeds for cell manufacturing at its upcoming Giga factory in Krishnagiri, Tamil Nadu. The company will also use Rs 1,600 crore for research and product development, and Rs 800 crore for debt repayment.
In FY23, Ola Electric reported a consolidated net loss of Rs 1,472.08 crore and said it might continue to report losses in the near term, considering higher operating expenses on account of product and sales expansion. The company’s total outstanding borrowing on a consolidated basis stood at Rs 1,768.82 crore, as of October 31, 2023.
The EV growth story in India has not slowed down, except for the aberrations arising out of seasonal fluctuations in demand and subsidy challenges, noted Bhavish Aggarwal.
Aggarwal emphasised that EV growth is in its absolute early stages. "When we launched our product three years ago, the EV space in India was nascent. Since then, EV penetration, particularly in the scooter segment, has surged to nearly 15 percent," he said.
"There will be cyclical ups and downs, subsidy changes, or seasonal changes," added Aggarwal. He was speaking during a pre-IPO conference meeting with the media on Monday. Aggarwal's statement was in response to a question about the apparent slowdown in the EV growth rate as against what was earlier anticipated.
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