Bhavish Aggarwal-led Ola Electric IPO likely to open on August 2

SoftBank-backed EV maker to pursue valuation of about $4.5 bn

Bhavish Aggarwal-led Ola Electric is gearing up to launch the anchor book for its much-anticipated initial public offering (IPO) on August 1, with the issue likely to open for public subscription from August 2 to 6, industry sources said.

The listing on the exchanges is likely to take place on August 9, making it the first Indian electric two-wheeler firm to do so.

Ola Electric aims to raise around $740 million through a mix of fresh issues and an offer for sale.

The SoftBank-backed electric vehicle (EV) maker is likely to pursue a valuation of approximately $4.5 billion in its IPO, marking about 18 per cent decrease from its last funding round valuation of around $5.5 billion, sources said. The company competes with Ather Energy, Bajaj and TVS Motor Company.

 

The firm declined to comment on this development.

Ola Electric has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India on December 22, 2023.

On June 20, Ola Electric received approval from the market regulator to proceed with its IPO plans. The nod has set the stage for Ola Electric to become the first Indian electric vehicle company to go public.

Aggarwal plans to sell up to 47.4 million shares, representing a 3.48 per cent stake, in the IPO. Other selling shareholders include Indus Trust, Alpine Opportunity Fund, DIG Investment, Internet Fund III (Tiger Global), MacRitchie Invest­ments, Matrix Partners, SoftBank Vision Fund, Alpha Wave Ventures, and Tekne Private Ventures.

The draft red herring prospectus (DRHP) details the allocation of proceeds from the fresh issue: Rs 1,226 crore towards capital expenditure (capex), Rs 800 crore for debt repayment, Rs 1,600 crore for research and development (R&D), and Rs 350 crore for growth initiatives.

In October last year, Ola Electric announced it had secured approximately Rs 3,200 crore ($380 million) in funding as part of an equity and debt round. 

The funding was obtained from Temasek-led marquee investors and project debt from State Bank of India, raising its valuation to $5.5 billion from a previous $5 billion, the sources said. However, this valuation is expected to have declined because of shifts in global tech stock valuations.

The funds raised in October last year were intended as a precursor to the IPO, with Aggarwal targeting a $6 billion valuation for the offering.

Ola Electric manufactures EVs and key components, such as battery packs, motors, and vehicle frames at its Futurefactory in Tamil Nadu, which is being expanded to become the world’s largest two-wheeler factory with an annual production capacity of 10 million units. 

Additionally, it has established a Gigafactory for Li-ion cell manufacturing in Tamil Nadu, initially with a capacity of 5 gigawatt hours (GWh), which, according to the sources, will scale up to 100 GWh in phases.

In the game

> Listing on the exchanges may occur on August 9

> The EV maker aims to raise around $740 million through a mix of a fresh issue and OFS

> The founder plans to sell up to 47.4 mn shares, representing a 3.48 % in IPO

> Other selling shareholders include Indus Trust, Alpine Opportunity Fund, DIG Investment, Internet Fund III 

> The firm filed draft red herring prospectus with Sebi on December 22, 2023

> On June 20 this year, it received approval from the market regulator to proceed with its IPO plans