Ola Electric sets IPO price band at ₹72-76 per share; issue to open on Aug 2

Bengaluru-based electric vehicle (EV) company Ola Electric has set the price band for its upcoming initial public offering (IPO) at ₹72-76 per share that will start for subscription on August 2, 2024. The anchor book will open for a day on August 1, while the three-day issue will close on August 6. The tentative listing date for shares of Ola Electric on the BSE and NSE is August 9.

The IPO of Ola Electric comprises a fresh issue of ₹5,500 crore and an offer for sale (OFS) of up to 8.49 crore shares by promoters and existing shareholders. At the upper end of the IPO price band, the company looks to garner ₹645.96 crore via OFS, taking the total issue size to ₹6,145.96 crore. This is going to be the first public offering by a pure EV company.

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.

As per the RHP filed with the capital market regulator SEBI, 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 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.