This will be the first IPO by a two-wheeler maker in India since the stock market debut of Bajaj Auto in 2008
Bhavish Aggarwal-led Ola Electric plans to raise Rs 5,500 crore in an initial public offering, according to draft papers filed with the market regulator Sebi on Friday.
This will be the first IPO by a two-wheeler maker in India since the stock market debut of Bajaj Auto in 2008.
The offering, which is the first by an EV maker in the country, will include an issue of fresh stock, with CEO Bhavish Aggarwal selling up to 47.4 million shares, the draft prospectus filed with the Securities and Exchange Board of India showed.
Also backed by Singapore's investment firm Temasek, the company was valued at $5.4 billion in a recent funding round, Reuters reported in September.
Ola Electric dominates India's electric two-wheeler segment, with a 32% market share and competes with TVS Motor, Bajaj Auto and Ather Energy, according to data from the Society of Manufacturers of Electric Vehicles.
Ather, backed by Singapore's GIC, is also planning an India listing and has a market valuation of $739.4 million, according to data from investment tracker Tracxn.
Ola Electric's IPO comes at a time when India has seen a record 213 IPOs this year, including from Tata Technologies and JSW Infrastructure, while the benchmark indexes have scaled record highs.
Its consolidated loss widened to Rs 1,472 crore for the year ended March 31, while revenue from operations climbed more than seven-fold.
Kotak Mahindra, Goldman Sachs and Bank of America are among the lead managers to the IPO.
The issue is being made through the book-building process, wherein not less than 75% of the issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the issue shall be available for allocation to non-institutional bidders, and not more than 10% of the issue shall be available for allocation to retail individual bidders.
As per the DRHP, the proceeds from the fresh issue will be used for capital expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project, repayment or pre-payment, in full or part, of the indebtedness incurred by subsidiary, OET, investment into research and product development, expenditure to be incurred for organic growth initiatives and general corporate purposes.
SoftBank-backed Ola Electric has slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, after reduced government incentives pushed up e-scooter prices, reported Reuters earlier this month.
A document seen by Reuters with Ola's latest financial projections shows it now expects to record 300,000 e-scooter sales in the ongoing fiscal year to March 2024, two-thirds lower than the earlier goal of 882,000 which Reuters reported in July.
The revenue target for the ongoing fiscal year period is now $591 million, versus the earlier goal of $1.55 billion - a cut of about 60%, according to the internal document.
While Ola is launching new scooters, parts of its nationwide network of over 400 service hubs which maintain and repair its EVs are showing signs of strain after a surge in sales, Reuters reported last month.
India e-scooters sales nearly tripled to over 700,000 during 2022-23 versus the previous year, with Ola a market leader, but the sales were still a fraction of 15 million plus two-wheelers sold in the country.
Ola will sell 900,000 units in 2024-25 and 2.3 million units in 2025-26, the new document showed. Those targets are 60% and 21% lower than earlier estimates when incentives were in place.
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