India’s leading electric scooter manufacturer, Ola Electric, has reportedly secured approval from market regulator SEBI to proceed with its much-anticipated initial public offering (IPO).
According to multiple media reports, the company received the approval on Tuesday (11 June, 2024) and aims to list on the stock exchanges within a month.
Ola Electric’s IPO may include a fresh share offering of Rs 5,500 crore and an offer for sale (OFS) worth Rs 1,750 crore, with a total of Rs 7,250 crore.
Bhavish Aggarwal, the founder and CEO of Ola Electric, reportedly plans to sell up to 47.4 million shares, representing a 3.48% stake in the IPO.
Other selling shareholders include Alpine Opportunity Fund, DIG Investment, Indus Trust, Internet Fund III (Tiger Global), MacRitchie Investments, Alpha Wave Ventures, Tekne Private Ventures, Matrix Partners, and SoftBank Vision Fund.
The IPO holds significance as it marks the first time in decades that a two-wheeler manufacturer ventures into the public market. It also marks Aggarwal’s debut in taking a company public, with an anticipated valuation of $7-8 billion.
The company is considering a re-IPO placement of shares valued at Rs 1,100 crore, potentially reducing the size of the fresh issue.
According to DRHP, Ola Electric plans to allocate funds towards capital expenditure, debt repayment, and research and development (R&D).
Approximately Rs 1,226 crore will be allocated for capital expenditure and Rs 800 crore for debt repayment. The majority of funds, around Rs 1,600 crore, will be dedicated to R&D, with an additional Rs 350 crore reserved for inorganic growth.
Since entering the EV segment in 2017, Ola Electric has emerged as a key player, commanding over 35% of the market in FY24.
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With a dominant 52% market share in the EV two-wheeler market, the company registered 34,000 units in a month, reflecting a 54% year-on-year growth.
Although Ola Electric company revenues of Rs 2,782 crore, a significant 510% increase, in FY 2022-23, its net loss grew to Rs 1,472 crore due to rising expenses.
In Q1 2023-24, Ola Electric recorded a total income of Rs 1,272 crore and losses of Rs 267 crore. As of June 30, 2023, the company’s net worth stood at Rs 2,111 crore.
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Disclaimer: The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before investing.
