Ola Electric IPO: EV maker raises ₹2,763 cr from anchor investors; issue opens today

A day ahead of the opening of the initial public offering (IPO), Ola Electric has raised ₹2,763 crore from anchor investors. The Bhavish Aggarwal-led electric vehicle (EV) company allotted 36.4 crore shares to 84 domestic and foreign investors at the upper end of the issue price at ₹76 per share. As many as 10 mutual funds applied through a total of 31 schemes.

Foreign and domestic institutions who participated in the anchor book were SBI MF, HDFC MF, Nippon MF, UTI MF, Mirae Asset MF, Norges, Nomura, Fidelity, Franklin Templeton, Pictet, Sundaram MF, HDFC Life Insurance Company, Matthews MF, Kotak Mahindra Life Insurance Company Ltd, Jupiter MF, Bandhan MF, BNP Paribas MF, Bharti AXA Life Insurance Company Ltd, JM Financial MF, Goldman Sachs, SocieteGenerale, Morgan Stanley, Bengal Finance and Investment Pvt Ltd, and others.

The highly-anticipated IPO of Ola Electric will open for subscription today at a price band of ₹72-76 per share. The three-day issue will close on August 4, while the tentative listing date of shares on the BSE and NSE is August 9.

Ahead of the IPO, Ola shares were commanding a grey market premium (GMP) of ₹13 apiece over the issue price in the unlisted market. The GMP has dropped from ₹16.5 on July 31. Considering the top end of the IPO price band and the current GMP, the estimated listing price of Ola Electric shares was indicated at ₹89 apiece, a premium of 17.1% over the IPO price of ₹76.

Ola Electric looks to raise ₹6,145.96 crore via IPO route, which is going to be the first public offering by a pure EV company. The issue comprises a fresh issue of ₹5,500 crore and an offer for sale (OFS) of up to 8.49 crore shares worth ₹645.96 crore by promoters and existing shareholders.

Under the OFS, promoters Bhavish Aggarwal, and Indus Trust will be offloading 3.79 crore and 41.79 lakh equity shares, respectively, while existing shareholders SVF II Ostrich (DE) LLC, Alpha Wave Ventures II LP, Alpine Opportunity Fund VI LP, Internet Fund III Pte, MacRitchie Investments Pte, Matrix Partners India Investments III LLC, Tekne Private Ventures XV, and Ashna Advisors LLP will be selling shares. SVF II Ostrich (DE) LLC, the largest shareholder in the company with a 21.98% stake or 8.1 crore shares, will be offloading 2.38 crore shares in the OFS.

The EV company has reserved 75% of the issue for qualified institutional buyers, 15% for non-institutional bidders, and the remaining 10% for retail investors, as per DRHP document. The lot size is 195 shares and in multiples there after. The minimum application amount for retail investors is ₹14,820 for one lot and maximum is ₹192,660 for 13 lots.

The capital raised from the fresh issue of equity shares will be used for capital expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project and repayment of indebtedness incurred by subsidiary, OET. A part of the capital will be used for investment into research and product development, funding organic growth initiatives, and general corporate purposes.

Established in 2017, Ola Electric is a wholly-owned subsidiary of ANI Technologies, the parent entity of Ola Cabs. Over the years, Bhavish Aggarwal-led company has become India's leading manufacturer of electric vehicles with the largest integrated and automated E2W manufacturing plant, spread across 400+ acres in Krishanagiri, Tamil Nadu. 

It manufactures EVs and core EV components such as battery packs and motors at Ola Futurefactory, its manufacturing facility in Krishnagiri. The company is in the process of building a EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu, India, which includes the Ola Futurefactory, upcoming Ola Gigafactory and co-located suppliers in Krishnagiri district.

According to the Redseer Report mentioned in the DRHP, in fiscal 2023, the company topped the charts among Indian incorporated electric 2-wheelers (E2Ws) and original equipment manufacturers (OEMs) in terms of revenue from E2W sales. The report highlights that India is at the forefront of electrification of mobility due to the favourable total cost of ownership as compared to internal combustion engine vehicles. India is the second largest two-wheeler market globally (by domestic sales volume) and electric two-wheelers (E2Ws) are projected to account for 41-56% of the domestic 2W sales volumes by fiscal 2028.

For the fiscal year 2024, Ola Electric’s net loss widened to ₹1,584.4 crore, from ₹1,472 crore in the previous fiscal. Revenue from operations, however, jumped 90.4% to ₹5,009.8 crore as compared to ₹2,630.9 crore in the last fiscal.The loss at the EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) increased to ₹1,267.6 crore in FY24, from a loss of ₹1,252.4 crore in FY23.

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, BofA Securities India Limited, Goldman Sachs (India) Securities Private Limited, Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited and BOB Capital Markets Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar of the offer.