Ola Electric Seeks SEBI Approval For IPO, Plans To Raise ₹5,500 Cr

The Bengaluru-based electric vehicle (EV) giant, Ola Electric, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), seeking approval for its initial public offering (IPO).

What Happened: According to the DRHP, Ola Electric is gearing up to raise a staggering ₹ 5,500 crore through a fresh issue of equity shares and an offer for sale (OFS) of 95,191,195 equity shares at a face value of ₹ 10. The funds procured will be channelled towards a plethora of purposes, including capital expenditure for the Ola Gigafactory project, repayment of indebtedness, research, product development, and general corporate purposes.

In the DRHP Ola Electric says that it holds a dominant position in the Indian EV market, with a 31% market share as of June 2023. The company is also eyeing overseas markets, with plans to establish an EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu.

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Ola Electric’s extensive omnichannel Direct-to-Consumer (D2C) distribution network comprises 935 experience centres, including 414 service centres across India. The company also recently unveiled new EV scooter models, with delivery slated to begin by the first half of Fiscal 2025.

In the year ended March 2023, Ola Electric’s operational revenue skyrocketed over sevenfold to ₹2,630.93 crore from ₹ 373.42 crore in the previous year. The company has also been approved for India’s PLI schemes related to the manufacturing of advanced automotive technology products and advanced cell chemistry batteries.

Why It Matters: The IPO filing comes on the heels of Ola Electric’s transition from a private limited company to a public one, a prerequisite for listing on the stock exchange. The company had also recently managed to raise ₹3,200 crore in funding, led by Temasek and supplemented by project debt from the State Bank of India, to bolster its EV business.

Prior to the IPO filing, Ola Electric had curtailed its sales forecast, launching new products at competitive prices and reducing the costs of existing offerings in a bid to strengthen its market position.

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