IPO news: Ola Electric gets Sebi's approval to launch Rs 7,250-crore IPO

Ola Electric has got approval from the Securities and Exchange Board of India to launch its Rs 7,250-crore initial public offering (IPO). The draft red herring prospectus (DRHP) for this IPO was submitted to Sebi on December 22, 2023. The IPO is likely to include a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totalling Rs 7,250 crore, Moneycontrol reported on Tuesday. 

The DRHP stated that existing shareholders were said to sell 95.19 million shares in the OFS. Founder Bhavish Aggarwal plans to sell 47.3 million shares, with initial investors like AlphaWave, Alpine, DIG Investment, Matrix, and others collectively selling 47.89 million shares. The Bengaluru-based company is eyeing a $6 billion valuation through the public offering. 

Ola Electric will utilise the funds raised from the IPO to establish the Ola Gigafactory initiative, aiming for a 100 GWh capacity for battery production on a large scale, for the manufacturing of electric vehicles, batteries, and other parts.

It will also use part of the funds for research, product development, organic growth, and general corporate purposes, including debt repayment. The firm will use around Rs 1,226 crore for capex, and Rs 800 crore to repay debt. It will spend the most, about Rs 1,600 crore, on R&D, and Rs 350 crore on inorganic growth, the report said. 

Without mentioning anything about the IPO, Aggarwal took to X and posted 'Exciting month ahead'.

Ola Electric currently commands a significant presence in the electric vehicle (EV) two-wheeler segment, boasting approximately 52% market share. As per data from the Government's VAHAN portal, Ola Electric registered 34,000 units in the most recent month, representing a notable year-on-year growth of 54%.

In financial terms, Ola Electric reported consolidated revenues amounting to Rs.2,782 crore for the fiscal year 2022-23, reflecting an impressive increase of nearly 510%. However, it is important to note that net losses have risen to Rs.1,472 crore attributable to elevated expenditures.