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Updated December 23rd, 2023 at 20:16 IST

Ola Electric IPO: 10 key insights for investors

Ola Electric witnessed substantial revenue growth, soaring to Rs 2,630.93 crore in fiscal year 2023 from Rs 373.42 crore in the previous year.

Reported by: Business Desk
Ola Electric
Ola Electric IPO | Image:Ola Electric
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Bhavish Aggarwal-led Ola Electric yesterday, December 22, filed DRHP papers with the Securities and Exchanges Board of India for its Initial Public Offering (IPO). Here are the top 10 things that investors should know about this highly anticipated market entry. 

IPO details

  • Ola Electric filed its Draft Red Herring Prospectus (DRHP) on December 22.
  • The proposed IPO includes a fresh equity share release of up to Rs 5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares at a face value of Rs 10.

Founder's stake

  • Bhavish Aggarwal, the founder of Ola Electric, plans to sell around 47.4 million shares in the IPO.
  • The SoftBank Group-backed e-scooter maker is eyeing a valuation between $7-8 billion by early 2024.

IPO subscription dates

  • The dates for the IPO subscription are yet to be announced, but reports suggest it may commence in early 2024.
  • Neither the offer price nor the IPO price band have been disclosed.

Corporate restructuring

  • Ola Electric transformed into a public company on November 17, 2023, marking a crucial step in its IPO preparations.
  • This transformation involved corporate restructuring and a name change from Ola Electric Mobility Private Limited to Ola Electric Mobility Limited.

Allocation breakdown

The IPO follows a book-building approach, with allocations set at 75 per cent for qualified institutional buyers (QIBs), up to 15 per cent for non-institutional investors (NIIs), and a maximum of 10 per cent for retail individual bidders.

Funds allocation

The fresh issue aims to raise funds for various purposes:

  • Rs 1,226.4 crore for Ola Cell Technologies' Gigafactory project.
  • Rs 1,600 crore for research and development (R&D).
  • Rs 350 crore for organic growth initiatives and general corporate purposes.
  • Rs 800 crore to repay/pre-pay debts of Ola Electric Technologies (OET).

Book managers

The book-running lead managers for the IPO include Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets, and BOB Capital Markets.

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Financial insights

  • Ola Electric witnessed substantial revenue growth, soaring to Rs 2,630.93 crore in fiscal year 2023 from Rs 373.42 crore in the previous year.
  • For the quarter ended June 30, 2023, the revenue from operations was reported at Rs 1,242.75 crore.

Sales highlights

  • November 2023 marked Ola Electric's highest-ever sales, reaching 30,000 units with a 35 per cent market share.
  • Since its launch in December 2021, the company has sold over 300,000 electric vehicles.

Risk factors

  • Ola Electric acknowledges potential short-term operating losses but remains committed to investing in business expansion and diversification.
  • Key risk factors include limited operating history, potential managerial changes, and challenges in manufacturing capabilities.

Investors eyeing Ola Electric's IPO can now navigate the market armed with these crucial insights. The e-scooter maker aims not just to revolutionise electric mobility but also to make a significant impact on the Indian stock market.

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Published December 23rd, 2023 at 20:16 IST

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