Ola Electric’s IPO Approval - Bhavish Aggarwal To Make Approx ₹ 650 Cr

Ola Electric has received the green light from the Securities and Exchange Board of India (Sebi) to launch its initial public offering (IPO). This marks a significant milestone for the company and paves the way for the first public offering by an electric vehicle startup in the country.

The IPO will see Ola Electric raise ₹7,250 crore through a combination of fresh issue of equity shares worth ₹5,500 crore and an offer for sale (OFS) of ₹1,750 crore by existing investors. This includes the company's founder and CEO, Bhavish Aggarwal, who will be offloading approximately 47.4 million shares, translating to roughly 1.3% of his total holding. Joining him will be SoftBank Vision Fund, a key early backer, which is looking to sell 23.8 million shares. Other notable investors selling a portion of their shares include Tiger Global (6.4 million shares), Alpha Wave Global (3.8 million shares), Matrix Partners India (3.7 million shares), and Temasek (1.3 million shares). This partial divestment by existing investors will allow them to realise some gains on their investment while simultaneously bringing fresh capital into Ola Electric to fuel its future endeavours.

Ola Electric's IPO has garnered significant interest, with the company eyeing a valuation of around $6 billion (₹ 600 crores). Based on a hypothetical valuation of $6 billion for Ola Electric, Bhavish Aggarwal's share sale of 47.4 million shares could translate into a windfall of around $78 million (roughly ₹ 650 crore). It's important to remember that this is an estimate and the actual amount he earns will depend on the final IPO valuation. The total proceeds from the Offer for Sale (OFS) by all existing investors, including Aggarwal, could reach as high as $156.7 million (over Rs 1,300 crore) at the $6 billion valuation. However, this figure will also fluctuate based on the final pricing during the IPO.

The company plans to utilise the proceeds for various growth initiatives. The IPO proceeds will be strategically allocated to fuel Ola Electric's growth. A significant portion, around ₹1,264 crore, will be directed towards expanding production capacity at the company's Ola Gigafactory. This is a crucial step to meet the surging demand for electric two-wheelers in India. Additionally, the company aims to settle outstanding debts by allocating roughly ₹800 crore. Furthermore, Ola Electric has earmarked ₹1,600 crore to boost investment in research and development over the next three years, ensuring it remains at the forefront of electric vehicle technology. The remaining capital will be used for organic growth initiatives and general corporate purposes.

The listing is expected to take place on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with Kotak Mahindra Capital Company and Goldman Sachs serving as the lead managers for the IPO.

This IPO will be instrumental in driving Ola’s growth strategy and propelling it towards a sustainable future. Ola Electric's IPO will be closely watched, setting an example for other EV startups seeking public listing in India. The success of this offering could further give strength to the electric vehicle sector and attract more investment.