Ola Electric, the prominent electric vehicle manufacturer, has garnered official approval from the Securities Exchange Board of India (Sebi) on June 20th for its upcoming initial public offering (IPO). The company aims to raise Rs 7,250 crore, marking a significant milestone as the first Indian EV firm to enter the public market.
The IPO comprises a fresh issue of equity shares totaling Rs 5,500 crore, complemented by an offer for sale (OFS) of over 95 million equity shares valued at approximately Rs 1,750 crore. Sources indicate Ola Electric is targeting a valuation between $6-7 billion through this offering.
Founder and CEO Bhavish Aggarwal plans to divest up to 47.4 million shares, representing a 3.48% 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.
Proceeds from the fresh issue, as outlined in the draft red herring prospectus (DRHP), will primarily fund capital expenditure (capex), debt repayment, and research and development (R&D). Specifically, Rs 1,226 crore is earmarked for capex, Rs 800 crore for debt repayment, Rs 1,600 crore for R&D, and Rs 350 crore for organic growth initiatives.
In terms of financial performance, Ola Electric’s revenue surged by 510% to Rs 2,782 crore in FY23 from Rs 456 crore in FY22. The company also improved its Ebitda margin, shifting from -157% in FY22 to -43% in FY23.
With Sebi’s approval secured, Ola Electric is poised to reshape the landscape as India’s pioneering electric vehicle company to debut on the stock market, reflecting its ambitions and robust growth trajectory in the EV sector.
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