Ola Electric has proposed a fresh issue of equity shares worth up to 5,500 crore and an offer for sale (OFS) of up to 9.52 crore shares to raise money. Bhavish Aggarwal, the promoter of Ola Electric, would divest 4.7 crore shares via OFS in the IPO, accounting for 50% of the entire OFS.
Ola Electric submitted its Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) with the Securities and Exchange Board of India (SEBI) on Friday evening, December 22, confirming the CNBC-TV18 newsbreak that the pureplay electric scooter manufacturer would file it tonight.
Ola Electric has proposed a fresh issue of equity shares worth up to 5,500 crore and an offer for sale (OFS) of up to 9.52 crore shares to raise money. Bhavish Aggarwal, the promoter of Ola Electric, would divest 4.7 crore shares via OFS in the IPO, accounting for 50% of the entire OFS.
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According to the company’s DRHP, Ola Electric has exercised its option to raise $1,000 crore via pre-IPO placement, and in that scenario, the fresh issue size will be lowered to that extent. Other organizations divesting 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. Among other things, the company claims that it paid a 15 lakh penalty to the MoRTH after an S1 scooter caught fire in Pune in March 2022.
The overall borrowings or debt of Ola Electric increased to 1,617 crore in FY24 from 39 crore in FY21. A portion of the IPO revenues would be used to settle loans owed by Axis Bank and Bank of Baroda subsidiaries. Ola Electric intends to use the money from its IPO to expand its EV portfolio, gigafactory, and sales.
The company warns that it may continue to sustain operating losses in the short term as it invests in its operations and develops its product portfolio. Ola Electric wants to use the IPO funds to fund Capex to expand the capacity of its Gigafactory. Another 800 crore would be used to pay down debt, and another 350 crore would be used for organic growth projects. Over the next three years, R&D will require a total of Rs 1,600 crore.
In November 2023, the company had its highest-ever sales of 30,000 units, giving it a market share of 35%. Since its inception in December 2021, it has sold over 300,000 automobiles. The company sold 9,841 e-scooters in December, and its sales in FY24 have now reached 1.8 lakh units.The company’s revenue climbed from 373.42 crore in FY23 to 2,630.93 crore in FY24.
Frequently asked questions
How much of Ola Electric does Bhavish Aggarwal own?
The most hilarious component of the Ola Electric valuation: “Today, Aggarwal owns a 40% stake in Ola Electric valued at $400 million.” He owns 6.7 percent of Ola, valuing his stake in the company at $382 million.
Did Ola Electric increase Authorised share capital by 172x?
Despite having difficulty delivering its highly anticipated EV scooters, the S1 and S1 Pro, the unicorn EV manufacturer expands authorized share capital by an amazing 17,121%.Ola Electric resolved to increase its authorized share capital from 22.2 crores to 3,825 crores in an EGM conducted on December 22, 2021.
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