Ola Electric Makes History with SEBI Approval for IPO, Leading Two-Wheeler EV Sector

OLa electric IPO

Three points you will get to know in this article:

  • Ola Electric gets SEBI approval for Rs 7,250 crore IPO.
  • IPO funds for capex, debt, R&D, growth.
  • Ola Electric’s 2023 financials show 510% revenue surge but increased net loss, with Q1 details.

SEBI Approval for Ola Electric's IPO

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Ola Electric, headquartered in Bengaluru, has purportedly secured SEBI’s sanction for its upcoming IPO, marking a significant milestone as India’s inaugural electric two-wheeler manufacturer to attain such approval. The company aims to mobilize a sum of Rs 7,250 crore, a move that follows nearly half a year since it lodged its draft red herring prospectus (DRHP) with SEBI.

Stakeholder Divestment Plans

The IPO of Ola Electric encompasses a primary offering of Rs 5,500 crore alongside a secondary offer for sale (OFS) valued at Rs 1,750 crore, aggregating to Rs 7,250 crore. As delineated in the DRHP, current stakeholders anticipate divesting 95.19 million shares through the OFS, with Ola Electric’s founder, Bhavish Aggarwal, intending to offload 47.3 million shares. Furthermore, the company is contemplating a pre-IPO placement of shares amounting to Rs 1,100 crore, potentially reducing the magnitude of the primary offering by that extent.

Backers' Share Divestment and Utilization of IPO Proceeds

The initial backers of Ola Electric, comprising AlphaWave, Alpine, DIG Investment, and Matrix, among others, are set to divest 47.89 million shares through the Offer for Sale (OFS). As outlined in the Draft Red Herring Prospectus (DRHP), the proceeds garnered from the initial public offering (IPO) will be earmarked for various strategic purposes, including capital expenditures (capex), debt settlement, and bolstering research and development (R&D) initiatives. Specifically, the company envisages allocating approximately Rs 1,226 crore towards capex, Rs 800 crore for debt repayment, Rs 1,600 crore to enhance R&D capabilities, and Rs 350 crore to foster inorganic growth endeavors.

Financial Performance of Ola Electric

During the fiscal year culminating in March 2023, Ola Electric disclosed a consolidated revenue figure of Rs 2,782 crore, marking a remarkable surge of almost 510%. Nonetheless, the company experienced a widening of its net loss to Rs 1,472 crore, primarily attributed to escalated expenditures. For the initial quarter of the 2023-24 financial year, Ola Electric revealed a total revenue of Rs 1,272 crore juxtaposed with losses totaling Rs 267 crore. As of June 30, 2023, the company’s net worth stood at Rs 2,111 crore.

Ola Electric, headquartered in Bengaluru, has obtained SEBI’s approval for its IPO, seeking to raise Rs 7,250 crore through a primary offering and secondary OFS. Current stakeholders and founder Bhavish Aggarwal plan to divest shares, with backers also intending to divest shares. The IPO proceeds will be utilized for capex, debt settlement, R&D, and inorganic growth. Ola Electric’s 2023 consolidated revenue surged by approximately 510%, accompanied by a net loss. The company reported revenue and losses for the initial quarter of the 2023-24 financial year. As of June 30, 2023, the company’s net worth was Rs 2,111 crore.

Peenak Maheshwari

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