The Ola Electric IPO is set to revolutionize the electric vehicle market with its innovative battery packs, strong distribution network, and significant market share, generating substantial net proceeds.
The Ola Electric IPO includes a fresh share sale of up to INR 5,500 crore and an offer-for-sale (OFS) of up to 8,49,41,997 equity shares by promoters and existing shareholders, totaling INR 645.56 crore at the upper price end. The company aims to raise INR 6,145.55 crore through this initial stake sale.
Promoter Bhavish Aggarwal, Indus Trust, and major shareholders such as Alpha Wave Ventures, Alpine Opportunities Fund, Internet Funds III, MacRitchie Investment, Matrix Partners India Investments, SFV II Ostrich (DE), Ashna Advisors, and Tekne Private Ventures XV will participate in the OFS.
The net proceeds will support the expansion of the cell manufacturing plant by its subsidiary, OCT, debt repayment, research and development, and general corporate purposes.
IPO Details and Market Performance
Even before the official price band announcement, shares of Ola Electric commanded a grey market premium of INR 15 per share, approximately 20 percent higher than the upper end of its price range. The anchor book will open for bidding on August 1, followed by public subscription from August 2 to August 6.
Since August 2021, Ola Electric has launched seven new products, including the Ola S1 Pro, Ola S1, Ola S1 Air, Ola S1 X, and Ola S1 X+. On August 15, 2023, the company announced new EV models and motorcycles like Diamondhead, Adventure, Roadster, and Cruiser.
Ola Electric’s omnichannel distribution network spans 870 experience centers and 431 service centers across India, with a significant export presence in Africa, LATAM, and Southeast Asia.
For the fiscal year ending March 2024, Ola Electric reported a net loss of INR 1,584.40 crore with revenue of INR 5,243.27 crore, compared to a net loss of INR 1,472.08 crore and revenue of INR 2,782.70 crore in FY23. Notably, Ola Electric leads the electric two-wheeler market with a 44 percent share, selling 36,716 units in June 2023.
IPO Reservation and Lead Managers
The IPO has reserved shares worth INR 5.5 crore for eligible employees, offering an INR 7 per share discount. Qualified institutional bidders will have 75 percent of the net offer, non-institutional investors 15 percent, and retail investors 10 percent.
The IPO’s book-running lead managers include Kotak Mahindra Capital, BofA Securities India, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, Goldman Sachs (India) Securities, ICICI Securities, and BOB Capital Markets, with Link Intime India as the registrar.
Valued at $5.5 billion in its last equity round, Ola Electric now seeks a valuation of $4.2-4.4 billion in the IPO. With over $1 billion raised from investors like SoftBank, Temasek, and Tiger Global, the company is positioned for significant growth. Although Ola Electric has shelved its electric car project, it continues to focus on electric scooters and motorcycles, reinforcing its leadership in the EV market.
In summary, the Ola Electric IPO is set to transform the EV market, driving innovation and growth.
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