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Updated December 25th, 2023 at 17:19 IST

Ola Electric files IPO papers, here’s how electric two-wheeler industry stacks up

A look at the growth of top companies by volume and legacy in the electric two wheelers space as Ola Electric files draft IPO papers last week

Gauri Joshi
EV
EV | Image:Republic Business
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Bengaluru-based cab hailing company’s electric vehicles arm Ola Electric has filed Draft Red Herring Prospectus (DRHP) with capital market regulator SEBI to raise funds through share sale via initial public offering (IPO) last week. The company plans to raise Rs 5,500 crore from the IPO which comprises of fresh issue of shares and offer for sale (OFS).

The electric two-wheelers have been witnessing a faster adoption rate as the sales for E2W surpassed 91,000-mark for the first time in November on the back of strong demand in festive season, data from VAHAN portal showed.

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The sales have been rising despite the government lowering the subsidy on electric vehicles to 15 per cent from 40 per cent under the FAME II scheme.

The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) is a central government scheme to boost the development and sales of Electric Vehicles (EVs) in a bid to combat climate change across the globe.

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Meanwhile, Ola is riding high on the EV momentum, but the electric arm’s IPO filing despite a fundraise in October this year comes at the back of mounting losses.

Ola Electric in last financial year said that its net loss widened to Rs 1,472 crore on the back of an increase in its expenses.

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Ola Electric has so far raised nearly $1.5 billion in equity and debt from a bunch of investors and SBI respectively, the last raise being in October. SoftBank in November marked up valuation of Ola Electric along with a few others in its portfolio, signalling investor optimism in the offering.

Till November this year, Ola Electric had sold more than 2 lakh electric scooters, leaving behind Ather and Bajaj by a huge margin in the race. The company is on track to cross the 3 lakh-mark in the 2023-24 current financial year.

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While TVS Motor Co, with sale of 1,62,399 units, has a 19.60 per cent share in E2W markets, Ather Energy, with sale of 1,01,940 units, has a 12.30 per cent share in the electric vehicles market as per data on VAHAN.

TVS Motor’s electric arm has sold 16,782 units in November 2023 as against sales of 10,056 units in November 2022, with the booking pipeline for TVS iQube is witnessing a healthy demand, as per an exchange filing.

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Bajaj Auto, which sells the Chetak electric scooter continues to be on the third spot and has increased its margin against Ather Electric. The company sold 11,681 scooters in November 2023, up from 8,932 scooters in October, recording a 30.78 per cent month-on-month growth.

The legacy scooter relaunched as an EV in 2019 has surpassed the 1,00,000-unit sales milestone in the two-wheeler EV market by the end of November. The Chetak EV took 47 months to achieve cumulative sales of 1,04,200 units, SIAM wholesales industry data showed.

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Bajaj Auto is just 5,229 units behind Ather Energy, third original equipment maker (OEM) after Ola Electric and TVS Motor Co (1,32,894 units).

Hero MotoCorp, which has an EV by name of VIDA V1 for European markets, emerged as the fastest growing company in November. The company sold 3,031 scooters in November 2023, up from 1,914 scooters sold in October 2023, recording a month-on-month growth of 58.36 per cent.

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Hero MotoCorp is also an investor in Ather. On December 14, Hero said it will increase its stake in Ather Energy to 39.7 per cent by purchasing additional shares in the latter at a cost of Rs 140 crore as per an exchange filing.

The acquisition of additional shares is likely to be completed by January 31, 2024. Ather Energy posted Rs 1,801 crore revenue in last financial year.

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Published December 25th, 2023 at 16:57 IST

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