Ola Electric files IPO papers, eyes Rs 5,500 crore in historic offering: Report

Ola Electric, a prominent player in India's electric vehicle (EV) landscape, submitted the Draft Red Herring Prospectus (DRHP) for its Rs 5,500 crore Initial Public Offering (IPO) papers with the Securities and Exchange Board of India (SEBI) today, December 22, news agency Reuters reported.

This move marks a historic moment for the Indian automotive industry, as Ola Electric is set to become the first EV maker to go public in the country and the first automaker in over two decades since Maruti Suzuki's IPO in 2003.

The IPO will encompass a blend of fresh equity and offers for sale by existing investors, with global heavyweights such as Temasek from Singapore and SoftBank from Japan among Ola Electric's notable backers.

In October 2023, Ola Electric successfully secured Rs 3,200 crore through a combination of equity and debt financing. The majority of these funds are earmarked for expediting the establishment of an EV manufacturing unit and a battery facility at its gigafactory in Tamil Nadu. Expected to be operational by early 2024, the gigafactory plays a pivotal role in Ola Electric's mission to contribute to environmental sustainability.

Despite grappling with a nearly doubled net loss of Rs 1,472 crore in FY23, Ola Electric has witnessed an impressive surge in consolidated revenue, which skyrocketed over six-fold from the previous year, reaching Rs 2,782 crore in the same fiscal year.

Under the leadership of Bhavish Aggarwal, Ola Electric has swiftly evolved from a cab aggregator to a frontrunner in the Indian EV manufacturing landscape. The company launched its inaugural electric scooter in 2021, experiencing exponential growth from a monthly production rate of 4,000 units in June 2021 to an impressive 80,000 units by the end of 2022—a staggering 20x growth.

However, Ola Electric is not without its challenges, grappling with safety concerns. The company initiated a voluntary recall of 1,441 vehicles in April last year following a fire incident. Several accidents and issues, including instances of front fork arm breakage, have prompted Ola to address customer concerns and prioritise safety measures.

The IPO, poised to be a significant financial milestone for Ola Electric, is managed by renowned financial institutions, including Kotak Mahindra Capital Company, BofA Securities India, and Axis Capital, among others.

(With Reuters inputs.)