Ola Electric, the Bengaluru-based electric vehicle manufacturer, has received approval from the Securities and Exchange Board of India (SEBI) for its upcoming initial public offering (IPO). This milestone comes six months after the company filed its draft red herring prospectus (DRHP) with SEBI on December 22, 2023.
Fundraising Plans
The company plans to raise up to Rs 5,500 crore through a combination of fresh issue of shares and an offer-for-sale (OFS) component of 95.2 million shares. Bhavish Aggarwal, the promoter of Ola Electric, intends to offload 47 million shares as part of the OFS, representing half of the total offering. Other stakeholders, including Indus Trust, Alpha Wave Ventures, and several others, will also sell part of their shares in the IPO.
Utilization of Funds
Proceeds from the IPO will be utilized for several purposes. A significant portion will go towards repaying loans of Ola Electric’s subsidiaries to Axis Bank and Bank of Baroda. Additionally, the company plans to allocate funds for expanding the capacity of its gigafactory by Rs 1,264 crore, debt repayment amounting to Rs 800 crore, and Rs 350 crore for organic growth initiatives. Research and development activities will receive an investment of approximately Rs 1,600 crore over the next three years.
Stakeholder Information
According to the DRHP, Bhavish Aggarwal holds the largest stake in Ola Electric with 36.94% shares, followed by SoftBank at 21.98%. Other significant stakeholders include Tiger Global, Indus Trust, and Alpha Wave Ventures.
Financial Performance
Despite significant revenue growth, Ola Electric reported losses for the fiscal year ending March 2023. The company’s total revenue surged by 510% to Rs 2,782 crore from Rs 456 crore in FY22. However, its losses also increased by 87.76% to Rs 1,472 crore during the same period.
The approval from SEBI marks a crucial step for Ola Electric as it prepares to enter the public market, aiming to raise substantial funds for expansion and debt repayment. The IPO is expected to provide investors with an opportunity to participate in the growth story of one of India’s leading electric vehicle manufacturers.
