Ola's IPO Flip-Flop: ₹575 Cr R&D Cash Grab for Debt Survival?

Ola Electric Mobility Ltd, has approved a proposed variation in the utilisation of its initial public offering (IPO) proceeds, marking the second such change within eight months. The board's decision, announced today, reallocates unspent funds across key objects, including shifting ₹575 crore from research and development to debt repayment and organic growth initiatives. This move awaits shareholder approval and underscores the company's adaptive strategy in a challenging market. 

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The fresh issue in the ₹6,146-crore IPO, which opened on August 2, 2024, raised ₹5,500 crore at a price band of ₹72-76 per share, valuing the firm at around $4 billion. Shares listed on August 9, 2024, but quickly eroded gains, plunging over 65% from the IPO price. As of March 18, 2026, the stock closed at ₹24.86 on the NSE, reflecting a market cap of approximately ₹10,939 crore—less than a fifth of its peak post-listing valuation.

Since the IPO, Ola Electric has grappled with deteriorating financials. Fiscal 2025 revenue dipped 10% to ₹4,510 crore from ₹5,000 crore the prior year, while Q3 FY26 (ended December 2025) saw operations revenue halve to ₹470 crore year-on-year, with a net loss of ₹487 crore. Market share in electric two-wheelers plummeted from 35% to 5.87%, slipping to fourth place amid quality concerns, service gaps, and moderating EV demand. Adjusted EBITDA loss widened to ₹323 crore in Q3 FY26, with margins at -68.7%. 

This variation is necessary to address mounting debt and liquidity strains. Of the ₹1,295.63 crore unutilised as of March 11, 2026, allocations now prioritise repaying borrowings for the company and subsidiary Ola Electric Technologies (OET)—boosting that bucket to ₹568.06 crore from ₹93.06 crore. Organic growth gets an extra ₹100 crore (to ₹372.46 crore), while R&D shrinks sharply to ₹120.10 crore unutilised. The first variation, approved by 99% shareholders in August 2025, extended timelines to FY27; this second tweak extends them further into FY26-27, capping general corporate purposes at 25% of proceeds.

The shift could stabilise finances short-term, enabling debt reduction and organic investments like sales infrastructure. However, repeated deviations risk eroding investor trust, potentially complicating future fundraising. With EV incentives waning and rivals like TVS and Bajaj gaining ground, Ola must execute flawlessly to regain trajectory. Shareholders will vote soon, shaping the firm's path in India's nascent e-mobility arena.