Should You Invest In Ola Electric IPO?

As Ola Electric Mobility's IPO is set to be open for subscription from August 2 should you invest in Bhavish Aggarwal's company?

What To Know: Ola's public issue is a book-built issue of ₹6,145.56 crore. The issue is a combination of a fresh issue of 72.37 crore shares aggregating to ₹ 5,500.00 crores and an offer for sale of 8.49 crore shares aggregating to ₹645.56 crores. 

The IPO is priced in the range of ₹72-76. The lot consists of 195 shares. The issue will be open from August 2 to 6. Share allotment will happen on August 7 and shares will be credited on demant accounts on August 8. The stock will be listed on the exchanges on August 9. 

Ola is planning to use net proceeds from the public issue for the capital expenditure to be incurred by its subsidiary, Ola Cell Technologies (OCT), for the expansion of the capacity of its cell manufacturing plant from 5 Gigawatt hours (GWh) to 6.4 GWh, repayment of debts incurred by its subsidiary, Ola Electric Technologies (OET) and investment into research and product development.

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The company will also use funds for organic growth initiatives and general corporate purposes. 

Here are the company's financial figures for the last three years. 

Financial Year	Revenue	EBITDA	EBITDA Margin (%)	Profit
FY22	373.4	(800.4)	(214.3)	(784.2)
FY23	2,630.9	(1,252.4)	(47.6)	(1,472.1)
FY24	5,009.8	(1,267.6)	(25.3)	(1,584.4)

Ventura gave a “subscribe” rating and said that Ola achieved the highest revenue among Indian electric two-wheeler segments in fiscal year 2023. Elara Capital said Ola's sales volume reached 3.29 lakh in FY24 capturing 35% of EV two-wheeler retail market share significantly ahead of its next competitor. 

Ventura pointed out that Ola's business model is based on three scalable platforms such as R&D and technology, adaptable manufacturing and supply chain and D2C omnichannel distribution.  However Elara Capital says Ola's EV market share is not sustainable as its peers have not increased their product portfolio and distribution network.

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