Ola Electric Subsidiary Secures Approval to Raise Up to ₹878 Crore, Stock Gains 5%

Ola Electric Mobility's wholly-owned subsidiary secured approval to raise ₹877.64 crore through preference shares, providing a boost to the electric vehicle maker's stock which closed 4.98% higher at ₹56.66 on the BSE on Monday. 

Ola Electric Technologies Private Limited (OET), the company's manufacturing and technology arm, received board and shareholder approval on September 30 to issue up to ₹87.76 crore Series A Optionally Convertible Redeemable Preference Shares (OCRPS) at ₹10 per share. The preference shares carry a nominal 0.001% dividend rate and will be issued to Ola Cell Technologies Private Limited (OCT), another wholly-owned subsidiary focused on battery cell research and manufacturing.

The intra-group funding transaction represents a strategic move to strengthen Ola Electric's financial position across its subsidiaries, particularly as the company seeks to reduce dependence on imported battery cells and achieve vertical integration in its electric vehicle operations. 

The fundraising announcement provided a temporary lift to Ola Electric's battered stock price, which has declined 42.83% over the past year. The shares have been particularly volatile, falling 24% from their September high of ₹71.24 before Monday's rally.

Over the past week, the stock had declined 1.98%, making Monday's 5% gain significant for investors. The company's market capitalisation currently stands at approximately ₹25,119 crore. 

Trading volumes were exceptionally heavy, with over 18.36 million shares changing hands by midday as the stock hit its 5% upper circuit limit. The stock has been trading in the Trade-to-Trade segment since September 9, requiring all transactions to be settled on a delivery basis. 

This latest fundraising represents a notable shift from Ola Electric's original IPO allocation strategy. When the company raised ₹5,500 crore in its August 2024 public offering, it had earmarked ₹1,228 crore specifically for OCT to expand cell manufacturing capacity from 5 GWh to 6.4 GWh. 

However, following shareholder approval at the company's first post-listing Annual General Meeting in August 2025, Ola Electric reallocated its IPO proceeds with 99.09% shareholder backing. The revised allocation dedicated ₹1,049 crore for research and development, ₹901 crore for organic growth initiatives, ₹395 crore for debt repayment, and ₹248 crore for general corporate purposes. 

The current ₹878 crore raise through preference shares differs markedly from Ola Electric's previous fundraising activities. In October 2023, the company secured $140 million in equity and $240 million in debt at a $5.4 billion valuation to establish its lithium-ion battery manufacturing facility. 

Earlier in May 2025, Ola Electric's board had approved plans to raise ₹1,700 crore through non-convertible debentures, though this proposal raised questions about capital efficiency given that more than half of the IPO proceeds remained in fixed deposits. 

The preference share structure of the current fundraising provides Ola Electric with greater financial flexibility compared to traditional debt instruments, as the optionally convertible nature allows for potential conversion to equity based on business requirements.

The fundraising comes at a challenging time for Ola Electric, with the company's electric two-wheeler market share declining from 18.7% in August to 13.2% in September. Revenue halved to ₹828 crore in the first quarter of FY26, whilst losses widened 23.3% to ₹428 crore compared to the same period last year. 

Despite operational challenges, the company has secured compliance certification for its Gen 3 scooter range under the government's Production Linked Incentive scheme, qualifying it for incentives worth 13-18% of sales value until 2028. This certification has been a key driver behind recent stock price movements, with shares rallying 55% in August following the PLI approval.