Ola Electric gets SEBI nod to launch ₹5,500 crore IPO: Report

Ola Electric gets SEBI nod to launch ₹5,500 crore IPO: Report/Reuters

MINT | June 11, 2024 | 08:48 PM IST | Breaking News | Follow on Google News

Ola Electric gets SEBI nod to launch ₹5,500 crore IPO: Report

Ola Electric gets SEBI nod to launch ₹5,500 crore IPO: Report

Electric vehicle maker Ola Electric has received approval from the markets regulator, the Securities and Exchange Board of India (SEBI), to raise funds via initial public offerings (IPO), according to a report by Moneycontrol.

This development occurs as EU cracker capacity is shutting down and margins remain weak. The stock has increased nearly 30 per cent in 2024, and has risen by more than 100 per cent over the past 12 months.

The IPO includes a fresh issue of ₹5,500 crore and an offer for sale (OFS) worth ₹1,750 crore, totaling ₹7,250 crore. In the OFS, existing shareholders are expected to sell 95.19 million shares.

Ola Electric’s founder, Bhavish Aggarwal, will sell 47.3 million shares, while the company’s initial investors—AlphaWave, Alpine, DIG Investment, Matrix, and others—will sell a combined 47.89 million shares.

On December 22, Ola Electric submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). It proposes to raise up to ₹5,500 crore through a fresh issue and an offer-for-sale (OFS) component of 95.2 million shares.

The firm is considering a re-IPO placement of shares worth ₹1,100 crore. If this proceeds, the size of the fresh issue will be reduced accordingly.

According to the DRHP, Ola Electric plans to use the funds for capital expenditures, debt repayment, and research and development (R&D). The allocation includes approximately ₹1,226 crore for capital expenditures, ₹800 crore for debt repayment, ₹1,600 crore for R&D, and ₹350 crore for inorganic growth.

Ola Electric currently leads the EV two-wheeler market with a market share of around 52%. According to data from the Government’s VAHAN website, the company registered 34,000 units in the past month, reflecting a 54% year-on-year growth.

For the financial year ending March 2023, Ola Electric reported consolidated revenues of ₹2,782 crore, an increase of nearly 510 per cent, despite a net loss widening to ₹1,472 crore due to increased expenses.

In Q1 2023-24, Ola Electric reported a total income of ₹1,272 crore and losses of ₹267 crore. As of June 30, 2023, the company had a net worth of ₹2,111 crore.

(The story will be updated with more details)

MINT