According to Bloomberg and Reuters, Indian electric two-wheeler (E2W) maker Ola Electric Mobility is set to launch its initial public offering (IPO). The company aims to raise up to INR61.46 billion (US$734 million) by selling shares at a price of INR72-76 each.
The IPO will open for subscription on August 2 and close on August 6, with shares expected to start trading on August 9. Ola plans to use the funds raised to expand its battery cell manufacturing capacity, repay debt, and invest in research and development.
Several leading investment banks, including Axis Capital, BofA Securities, and Goldman Sachs, are managing the IPO. After the IPO, the India-based unicorn is expected to have a market capitalization of over US$4 billion.
Bhavish Aggarwal, chairman of Ola Electric, was quoted by Reuters saying that the company's mission is to make India a global EV hub. Although the company reiterated its commitment to making electric four-wheelers (E4Ws), Reuters reported the plan was suspended as Ola Electric is focusing on E2Ws and EV battery cell manufacturing.
India's stock market is surging this year, fueled by strong economic growth and stable government policies. Numerous companies are capitalizing on this boom through IPOs, raising billions of dollars. Ola Electric's IPO is part of this trend, but its valuation is more modest than initially planned, aligning it closer to traditional auto companies rather than tech giants.
Ola Electric filed its Draft Red Herring Prospectus (DRHP) on December 22, 2023. According to the filing, India's largest electric two-wheeler (E2W) manufacturer specializes in manufacturing EVs and key EV components through its vertically integrated technology and manufacturing capabilities at its Ola FutureFactory in Tamil Nadu. In addition, Ola is preparing to launch the Ola Gigafactory in the same state, focused on cell manufacturing, alongside co-located suppliers.
Despite being at a loss since its establishment, Ola Electric grabbed over 40% share in India's E2W market.
Ola Electric financial performance (INRm) | ||
Date | Sales | Profit |
FY21 | 1060.81 | -1992.32 |
FY22 | 7562.6 | -7841.5 |
FY23 | 27826.97 | -14720.8 |
1QFY24 | 12786.75 | -2671.56 |
Source: Ola Electric, December 2023
India E2W registratgion, January-July, 2024 (%) | ||
Maker | Registration | Market share |
Ola Electric | 264,835 | 42.65 |
TVS Mator | 107,126 | 17.25 |
Bajaj Auto | 81,918 | 13.19 |
Ather Energy | 61,139 | 9.84 |
Hero MotoCorp | 18,172 | 2.93 |
Others | 87,832 | 14.05 |
Source: Vahan, July 2024
