 "Ola Electric receives Sebi approval for IPO; looks to raise Rs 5,500 crore")
Ola Electric, India’s leading manufacturer of electric two-wheelers, has received the green light from the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO). This move marks the first IPO by an electric vehicle (EV) startup in the country and is set to be one of the largest new-age public offerings in 2024.
The Bengaluru-based company filed its draft red herring prospectus (DRHP) with SEBI on 22 December, proposing to raise up to Rs 5,500 crore through a fresh issue of shares. Additionally, the IPO includes an offer-for-sale (OFS) component of 95.2 million shares.
The company aims to generate funds through a combination of fresh issue and OFS, wherein existing stakeholders will sell part of their shares to the public. The DRHP outlines that Ola Electric’s promoter, Bhavish Aggarwal, will offload 47 million shares, representing half of the total OFS.
Other entities set to divest their stakes include Indus Trust, Kaha Wave Ventures, Alpine Opportunity Fund, DIG Investment Internet Fund, MacRitchie Investments, Matrix Partners India Investments, SVF II Ostrich, and Tekne Private Ventures XV.
The firm has also kept the option to raise Rs 1,000 crore via pre-IPO placement, a move that would correspondingly reduce the fresh issue size.
Ola Electric plans to allocate a portion of the IPO proceeds towards repaying loans owed by its subsidiaries to Axis Bank and Bank of Baroda. Furthermore, significant funds will be directed towards expanding its electric vehicle portfolio and increasing the capacity of its gigafactory, a large-scale manufacturing facility dedicated to EV production.
Specifically, the company intends to use approximately Rs 1,264 crore for the gigafactory's capacity expansion, Rs 800 crore for debt repayment, and Rs 350 crore for organic growth initiatives. An additional Rs 1,600 crore is earmarked for research and development over the next three years, a crucial investment for maintaining innovation and competitiveness in the rapidly evolving EV market.
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Through the public offering, the company is targeting a valuation of $6 billion, according to a report by The Economic Times.