Ola Electric, a leading electric vehicle company, has received approval from SEBI for its initial public offering (IPO).
This IPO will be the first for an electric vehicle startup in India and the largest new-age IPO in 2024.
SoftBank and Temasek-backed Ola filed its draft red herring prospectus (DRHP) with SEBI on December 22.
The IPO aims to raise up to ₹5500 crore through a new issue and an offer for sale (OFS) of up to 9.52 crore shares.
Promoter Bhavish Aggarwal’s Share Sale
Ola Electric’s promoter, Bhavish Aggarwal, will sell 4.7 crore shares through the OFS in the IPO, accounting for 50% of the total OFS.
The company has the option to raise ₹1000 crore through pre-IPO placement, which will reduce the size of the new issue as mentioned in its DRHP.
Other investors, including Indus Trust, Kaha Wave Ventures, Alpine Opportunity Fund, DIG Investment Internet Fund, MacRitchie Investments,
Matrix Partners India Investments, SVF II Ostrich, and Techne Private Ventures XV, will also sell their stakes through the IPO.
Utilization of IPO Proceeds
The proceeds from the IPO will be used for several purposes:
1) Repaying loans from Axis Bank and subsidiaries of Bank of Baroda.
2) Expanding Ola Electric’s EV portfolio, Gigafactory, and sales.
3) Allocating approximately ₹1,264 crore for capital expenditure to expand the Gigafactory’s capacity.
4) Using ₹800 crore for loan repayment and ₹350 crore for other operational needs.
5) Investing ₹1,600 crore in research and development over the next three years.
Market Competition
Ola Electric competes with established companies like TVS Motors and Bajaj Auto, as well as startups such as Ather Energy.
Other major new-age startups, including Swiggy and FirstCry, have also filed their draft IPO documents with SEBI and are awaiting regulatory approval.
