Indian electric vehicle (EV) manufacturer Ola Electric Mobility Ltd has announced its initial public offering (IPO) details. The IPO, worth Rs 6,145.56 crore, will open for subscription on August 2, with bidding concluding on August 6. The company has fixed the issue's price band in the range of Rs 72-76 per share at a face value of Rs 10.
Key details
The EV maker has reserved 75% of the shares in the IPO for qualified institutional buyers, 15% for non-institutional investors and 10% for retail investors. The minimum bid size is 195 equity shares, amounting to an investment of Rs 14,820 at the upper price band. Eligible employees will offered stock at a discount of Rs 7 per share.
Issue composition and shareholders
The IPO consists of a fresh issue of equity shares worth Rs 5,500 crore and an offer for sale (OFS) of up to 84 million shares. The company's promoter Bhavish Aggarwal, and investors including SoftBank, Temasek and Matrix Partners India will offload their stakeholding through the OFS route.
Valuation and investor bids
Ola Electric is aiming for a valuation of about $4 billion, approximately 25% lower than its last private funding round. The IPO is likely to attract significant interest from leading domestic and international investors.
Domestic investors like SBI AMC, HDFC AMC, Nippon Life India AMC and UTI AMC are expected to bid around $200 million each, while Fidelity, Nomura and Norway's Norges Bank may bid in the range of $75-100 million each in the anchor book.
Sales and performance
Ola Electric has reported revenue growth of 90% in FY24, driven by increased e-scooter sales. The company has cemented its dominance with over 50% market share. Ola Electric reported revenue from operations of Rs 5,009.8 crore, a significant increase from Rs 2,630.9 crore in FY23.
The company's losses stood at Rs 1,584.4 crore for FY24, compared to Rs 1,472.1 crore in FY23.
The EV maker has an extensive product portfolio and a busy distribution network, with 870 experience centres and 431 service centres across the country.
Utilisation of Funds
The net proceeds from the IPO will be used primarily for:
Capacity expansion: Rs 1,227.6 crore will be allocated to increase the capacity of Ola Electric's cell manufacturing plant from 5 GWh to 6.4 GWh.
Research and development: Rs 1,600 crore will be invested in research and product development.
Debt repayment: Rs 800 crore will be used to repay existing debts.
Organic growth initiatives: Rs 350 crore will be allocated for organic growth initiatives.
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