Ola Electric looking to raise Rs 5,800 cr via IPO, to file DRHP by Dec 20: Report

Bhavish Aggarwal-led Ola Electric is preparing to submit its Draft Red Herring Prospectus (DRHP) to market regulator Securities and Exchange Board of India (SEBI) by December 20, said a report on Monday. 

The move comes as part of the company's plans to raise a substantial $700 million (approximately Rs 5,800 crore) through its Initial Public Offering (IPO), reported CNBC TV18. 

Ola Electric is looking to list at a valuation of $7-8 billion by early 2024, said the report adding that the funds will be used to expand EV business and for lithium ion cell manufacturing.

Ola Electric has slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, after reduced government incentives pushed up e-scooter prices, reported Reuters last week, according to a document and two sources with direct knowledge of the company's finances.

A document seen by Reuters with Ola's latest financial projections shows it now expects to record 300,000 e-scooter sales in the ongoing fiscal year to March 2024, two-thirds lower than the earlier goal of 882,000 which Reuters reported in July.

The revenue target for the ongoing fiscal year period is now $591 million, versus the earlier goal of $1.55 billion - a cut of about 60%, according to the internal document.

While Ola is launching new scooters, parts of its nationwide network of over 400 service hubs which maintain and repair its EVs are showing signs of strain after a surge in sales, Reuters reported last month.

Sales of e-scooters in India nearly tripled to over 700,000 during 2022-23 versus the previous year, with Ola a market leader, but the sales were still a fraction of 15 million plus two-wheelers sold in the country.

The revised targets in the document show the company will record an operating loss of $92 million this year, and a profit of $111 million next year, reported Reuters.

Ola will sell 900,000 units in 2024-25 and 2.3 million units in 2025-26, the new document showed. Those targets are 60% and 21% lower than earlier estimates when incentives were in place.

With inputs from Reuters