Ola Electric Gets Approval From SEBI For ₹5,500 crore IPO

Bengaluru-based Ola Electric has obtained the nod from the Securities and Exchange Board of India (SEBI) for its much-anticipated IPO which the company had submitted in December, 2023. Making it the first IPO by an Indian EV maker and also the first automotive brand in 20 years to issue an IPO since Maruti Suzuki. 

The company plans to raise ₹5,500 crore through a fresh issue, along with an offer-for-sale component of 95.2 million shares. Ola Electric aims for a valuation of $6 billion ( approximately ₹50,000 crores) through this public offering. 

The IPO proceeds will be utilised for capacity expansion, debt repayment, and research and development (R&D) initiatives. Approximately ₹1,226 crore will be allocated for capital expenditure, while ₹800 crore will be used for debt reduction. A substantial ₹1,600 crore will be dedicated to R&D efforts. Additionally, ₹350 crore has been earmarked for inorganic growth opportunities. 

Currently, Ola Electric dominates the Indian EV two-wheeler market with a 52% market share. In the recent month, the company registered 34,000 units, reflecting a 54% year-on-year growth, which was primarily driven by increasing consumer demand. Coupled with the fact that the brand also recently launched its new affordable range of Ola S1 X scooters which starts from ₹70,000 onwards, further asserts its objective to make its products more accessible to the masses.

The IPO nod comes at a time when the EV industry is struggling as subsidies are diminishing thereby increasing the prices of electric scooters. Ola Electric has taken inspiration from Tesla as the brand looks to set up an end-to-end EV ecosystem of manufacturing and delivery. Ola Electric had also signed an MOU with the Tamil Nadu government and invested ₹7,614 crores for building a Giga Factory in Krishnagiri for cell manufacturing with a capacity of 100 MW. 

The company's financial performance underscores its commitment to growth and innovation. In the financial year ended March 2023, Ola Electric reported consolidated revenues of ₹2,782 crore, a staggering 510% increase compared to the previous year. While the net loss widened to ₹1,472 crore due to higher expenses associated with rapid expansion and development, the company's net worth stood at a resilient ₹2,111 crore as of June 30, 2023, demonstrating its financial strength and long-term potential.