India’s leading electric vehicle company Ola Electric Mobility has filed preliminary papers with market regulator Sebi for an initial public offering (IPO) that could raise around Rs 10,000 crore. This would make Ola Electric the first EV company in India to go public.
Ola Electric Seeks to Raise Rs 5,500 Crore Through Fresh Issue of Shares
As per the draft red herring prospectus (DRHP) filed on Friday, Ola Electric plans to raise Rs 5,500 crore through the fresh issue of shares as part of the IPO.
The company said it would use the IPO proceeds for expanding manufacturing capabilities at its battery cell factory, paying off debt and funding research and development activities.
Additionally, some existing shareholders will sell around Rs 4,500 crore worth of shares as part of the offer for sale (OFS) component of the IPO. This includes founders Bhavish Aggarwal and Ankit Jain, as well as investors like SoftBank, Matrix Partners and Tiger Global.
IPO Could Value Ola Electric at $10 Billion
According to estimates, the IPO could value Ola Electric at around $10 billion. The company was last valued at $5 billion when it raised funding in January 2022. An IPO will help Ola Electric raise funds to fuel its expansion plans in a capital-intensive sector.
Ola Electric is among the fastest growing EV makers in India. It began operations in 2021 and has already built the world’s largest electric two-wheeler manufacturing facility in Krishnagiri, Tamil Nadu.
The company launched its Ola S1 and S1 Pro electric scooters in 2021 and is gearing up to launch an electric car by 2024-25.
First Auto Company IPO in India Since Maruti’s 2003 Offering
Notably, Ola Electric’s proposed IPO would be the first by an automobile company in India since Maruti Suzuki’s IPO back in mid-2003. Maruti or then Maruti Udyog went public decades after it started operations in 1981.
The electric vehicle space is still very nascent in India but holds promising long-term potential as the country looks to lower its oil imports and carbon emissions. As a pioneer and market leader in India’s EV revolution, Ola Electric has first-mover advantage to tap into the opportunities emerging in this sunrise sector.
Ola Electric Led By Bhavish Aggarwal Who Also Founded Ola Cabs
Ola Electric is the EV venture led by homegrown entrepreneur Bhavish Aggarwal who also founded Ola Cabs over a decade ago. Ola Electric was spun off from the ride hailing company Ola as a separate entity in 2019. It currently designs and manufactures electric scooters, batteries and charging infrastructure at its facilities in India.
Top Shareholders in Ola Electric
Some of the top shareholders in Ola Electric include:
- Bhavish Aggarwal – 37%
- SoftBank – 22%
- Ola Electric Employees – 7.7%
- Tiger Global – 6%
- Matrix Partners – 5.4%
SoftBank and Tiger Global are marquee global investors while Matrix Partners has backed ventures like Oyo Rooms in India. Employees also own a fair share in Ola Electric which indicates their trust and confidence in the company’s future prospects.
Ola Cabs founder Aggarwal remains the single largest shareholder and has control over strategic decision making. Ola Electric is his big bet to capitalize on the electric mobility wave sweeping India and the world.
Why Ola Electric IPO Matters for India’s EV Industry
The proposed Ola Electric IPO matters greatly for India’s still evolving but promising electric vehicle industry for a few reasons:
- It will provide the sector more mainstream visibility and investor interest rather than just niche cleantech capital
- It will also lead to greater scrutiny of Ola Electric which could positively rub off on operational discipline across major EV startups
- The IPO could provide funding for expansion of Ola Electric’s ambitions to vertically integrate across the electric mobility supply chain
- If successful, the IPO could set the stage for other major Indian EV startups like Ather Energy, M&M-backed Switch Mobility and even Tata Motors’ EV division to go public
In conclusion, Ola Electric’s upcoming IPO bears significance as a seminal event providing the right tailwinds for advancement of India’s electric vehicle ecosystem.