Ola Electric’s IPO: 10 Key Points for Investors

The SoftBank-backed electric scooter maker, Ola Electric, is set to open its IPO for retail subscriptions on August 2, while institutional investors can subscribe a day earlier. The IPO will close for retail investors on August 6. Here are ten crucial details for investors:

1. IPO Size Ola Electric, led by Bhavish Aggarwal, plans to raise Rs 5,500 crore in fresh capital through the IPO, in addition to the offer-for-sale (OFS) component. Aggarwal will offload 37.9 million shares, while investors like Alpha Wave, Alpine, DIG Investment, and Matrix will sell 47.89 million shares via the OFS.
2. IPO Date The IPO will be open for institutional investors on August 1 and close for retail investors on August 6, according to the final prospectus.
3. Valuation Ola Electric expects a valuation of $4.2 billion to $4.4 billion, which is 18.5% to 22% lower than its last funding round in September led by Singapore’s investment firm Temasek, which valued it at $5.4 billion. Initially, Ola Electric aimed for a $6-7 billion valuation but has since adjusted its expectations.
4. Financial Performance Ola Electric’s revenue from operations increased to Rs 5,009.8 crore in fiscal 2024, up from Rs 2,630.9 crore in fiscal 2023. This growth was driven by increased sales of the Ola S1 and Ola S1 Pro scooters, and the commencement of deliveries of the Ola S1 Air and Ola S1 X+ in fiscal 2024. However, the company’s loss for the year also increased to Rs 1,584.4 crore in fiscal 2024, up from Rs 1,472 crore in fiscal 2023.
5. Scooter Sales In fiscal 2024, Ola Electric sold 329,618 scooters, a significant increase from the 156,251 scooters sold in fiscal 2023.
6. Market Position Ola Electric dominates the electric scooter segment in India, often capturing over a third of the market. It competes with companies like Hero MotoCorp-backed Ather Energy, Bajaj Auto, and TVS Motors. As of July 27, Ola Electric held a 39% market share for the month in the electric two-wheeler market. In June, its market share was 46%, down from 58% in May.
7. Use of Proceeds Ola Electric plans to use Rs 1,227 crore of the net proceeds from the IPO to expand its battery cell manufacturing plant, Ola Gigafactory, from 5 GWh to 6.4 GWh by April 2025. Additionally, Rs 800 crore will be used to repay loans of its unit Ola Electric Technologies, and Rs 1,600 crore will be invested in research.
8. First EV Startup IPO SEBI approved the IPO last month, making it the first EV startup in India to go public and one of the biggest new-age IPOs in 2024.
9. Lead Managers Kotak, Citi, BofA Securities, Goldman Sachs, Axis, I-Sec, SBICAP, and BOBCAPS are the book-running lead managers for the offer.
10. Registrar Link Intime India Private Limited is the registrar for the IPO.

Investors looking to participate in India’s stock market should keep these key points in mind as Ola Electric prepares for its landmark IPO.