Ola Electric IPO: India’s First EV Startup IPO With $6 Billion Valuation

The upcoming Ola Electric IPO will be the first-ever IPO by an EV startup in India and is poised to be one of the biggest new-age IPOs of the year. But will Ola Electric manage to achieve its ambitious revenue targets for FY24 while also steering towards profitability?

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The IPO of Ola Electric is all set to make its debut!!! Ola Electric, a leading player in India’s electric two-wheeler (E2W) market, has recently received approval from the Securities and Exchange Board of India (SEBI) to launch its initial public offering (IPO). The company aims to achieve a $6 billion valuation through this public offering, marking a significant milestone not just for Ola Electric but for the entire EV startup ecosystem in India.

It is important to highlight that Ola Electric IPO will be the first-ever IPO by an EV startup in India and is poised to be one of the biggest new-age IPOs of the year.

Launched in 2019, Ola Electric Mobility filed its draft red herring prospectus (DRHP) with SEBI on December 22, 2023. The company aims to raise up to ₹55,000 million through a fresh issue and an offer-for-sale (OFS) component of 95.2 million shares.

Ola IPO: Who Stands to Gain?

The Ola Electric IPO will see significant share sales by key stakeholders. Founder Bhavish Aggarwal will sell up to 47.4 million shares, representing a 1.3% stake in the company. This sale could net him approximately $78 million, reflecting the anticipated $6 billion valuation for Ola Electric.

Other major shareholders participating in the Ola Electric IPO include SoftBank Vision Fund (23.8 million), Tiger Global (6.4 million), Indus Trust (4.2 million), Alpha Wave Global (3.8 million), Matrix Partners India (3.7 million) and Temasek (1.3 million). This strategic sell-off indicates a calculated move by investors to capitalize on the company’s anticipated market valuation.

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A substantial portion of the funds raised through the IPO, around ₹1,226 crore, will be allocated to expanding the capacity of Ola Electric’s cell manufacturing plant, Ola Gigafactory, from 5 GWh to 6.4 GWh. This expansion is crucial for meeting the growing demand for electric vehicles in India and enhancing the company’s production capabilities.

Ola Electric IPO Preparations

As Ola Electric prepares for its public debut, the company has implemented cost-cutting measures. Recently, the EV maker laid off over 600 employees across various verticals to streamline operations and reduce expenses. This move comes after similar job cuts at its sister company, Ola Cabs, which let go of 200-250 employees. Some key executives, including CEO Hemant Bakshi and CFO Kartik Gupta, exited the firm.

Additionally, Ankush Aggarwal, Ola Electric’s former chief business officer, has returned to the ride-hailing business.

According to its draft IPO papers, Ola Electric had 3,733 employees as of October 2023.

In terms of financial performance, Ola Electric’s revenue increased a whopping 510% YoY in FY23, amounting to ₹2,782.6 crore. However, the net loss also surged 87.8% YoY to ₹1,471.6 crore due to higher operating expenses. Despite these challenges, the company remains optimistic and has projected a revenue of ₹4,655 crore for FY24.

A Busy IPO Season Ahead

Ola Electric’s IPO is part of a larger wave of public offerings that is expected in the coming months. Reports suggest that over 30 companies are poised to enter the Indian stock market, aiming to collectively raise more than ₹50,000 crore.

Notable upcoming IPOs include FirstCry, Fincare SFB, NSDL, Afcons Infrastructure, Waaree Energies, Asirvad Microfinance, Stanley Lifestyles, One MobiKwik Systems, Emcure Pharmaceuticals, Allied Blenders and Distillers, Shiva Pharmachem, and Bansal Wire Industries.

Ola Electric’s journey towards its IPO marks a pivotal moment for the company and the broader EV industry in India. The approval from SEBI not only underscores investor confidence but also sets the stage for further advancements in the electric mobility space. Will Ola Electric manage to achieve its ambitious revenue targets for FY24 while also steering towards profitability? Only time will tell.

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