Ola Electric IPO: On Friday, December 22, Bengaluru-based electric two-wheeler manufacturer Company backed by SoftBank Group, Ola Electric, submitted its preliminary draft papers to the Securities and Exchange Board of India (SEBI). The company aims to raise Rs 5,500 crore through an initial public offering (IPO).
This marks the first IPO by an automaker in two decades and the maiden public offering by a purely electric vehicle (EV) company aspiring to be listed on domestic stock exchanges. The proposed IPO involves a fresh issue of equity shares amounting to Rs 5,500 crore and an offer for sale (OFS) of 9.52 crore equity shares, as outlined in the draft red herring prospectus (DRHP).
The company’s founder, Bhavish Aggarwal, is poised to divest up to 4.73 crore shares in the OFS. Other notable stakeholders in the company, including SoftBank and Tiger Global, will also be reducing their holdings through the share sale. Sources indicate that the leading electric two-wheeler player in the country aims to achieve a market capitalization of up to $8 billion. Having raised approximately $1 billion over the years, the startup was last valued at $5.4 billion in October 2023.
Ola Electric IPO: Top highlights from DRHP:
- IPO Overview: The IPO entails a fresh issue of equity shares amounting to ₹5,500 crore and an Offer for Sale (OFS) of 95,191,195 equity shares with a face value of ₹10 each. Bhavish Aggarwal, the founder of Ola Electric, plans to sell up to 47.4 million shares, as per the draft papers dated December 22. It is worth noting that Aggarwal had previously invested ₹45 lakh in the Pune-based EV startup, Tork Motorcycles.
- IPO Goals: According to the Draft Red Herring Prospectus (DRHP), the net proceeds, amounting to up to ₹1226.4 crore from the fresh issue, are earmarked for capital expenditure related to the Ola Gigafactory project by the subsidiary, Ola Cell Technologies (OCT). Furthermore, ₹1,600 crore is allocated for investments in research and development (R&D), while ₹350 crore is designated for organic growth initiatives and general corporate purposes. Additionally, ₹800 crore is earmarked for repaying or pre-paying the indebtedness incurred by the subsidiary, Ola Electric Technologies (OET).
- IPO Dates: While the DRHP of Ola Electric does not specify the commencement and conclusion dates for the IPO subscription, various media reports suggest that the public offering is anticipated to commence in early 2024. As of now, neither the offer price nor the IPO price band has been disclosed.
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IPO Allotment Structure: The offering is facilitated through the book-building process, wherein a minimum of 75 percent of the issue will be allotted proportionately to qualified institutional buyers (QIBs). Furthermore, up to 15 percent of the issue is earmarked for allocation to non-institutional investors (NIIs), and a maximum of 10 percent of the issue is reserved for retail individual bidders.
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IPO Book-Running Lead Managers: The book-running lead managers for the IPO include Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, BofA Securities India Limited, Goldman Sachs (India) Securities Private Limited, Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited, and BOB Capital Markets Limited. Additionally, Link Intime India Private Limited is designated as the registrar of the offer.
6. Company Financial Performance: In the fiscal year 2023, the company witnessed a remarkable surge in revenue from operations, surpassing sevenfold and reaching ₹2,630.93 crore compared to ₹373.42 crore in the preceding year. For the quarter concluding on June 30, 2023, the revenue from operations amounted to ₹1,242.75 crore. Notably, the company achieved the highest ranking among Indian incorporated electric two-wheelers (E2Ws) and original equipment manufacturers (OEMs) concerning revenue from E2W sales in FY23.
7.Product Capacity: Ola Electric unveiled its inaugural electric vehicle model, the S1 Pro, in August 2021 and presently boasts a portfolio comprising five scooter models. Within a span of nine months from the debut of its first electric scooter, Ola Electric achieved the status of being the top-selling player in the Indian electric two-wheeler (E2W) segment, as per registrations on the VAHAN portal of the Ministry of Road and Highways. As of the three-month period concluding on June 30, 2023, the company commands a robust E2W market share of 31 percent and expresses its intention to explore the exportation of electric vehicles to specific international markets, as outlined in the Draft Red Herring Prospectus (DRHP).8.Principal Risks Factors with the IPO: Highlighting significant risk factors in its Draft Red Herring Prospectus (DRHP), Ola Electric acknowledges its limited operating history marked by losses and negative cash flows from operations. The company foresees the possibility of ongoing losses in the short term. Challenges related to defects and quality issues may affect the manufacturing timelines of the company. Additionally, Ola Electric confronts diverse risks that pose potential obstacles to its in-house cell manufacturing capabilities at the Ola Gigafactory.
OLA ELECTRIC का पहला IPO: सेबी को पेश किए गए दस्तावेज, निवेश के लिए बढ़िया मौका होगा
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