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Ola Electric, the Bengaluru-based electric two-wheeler manufacturer, has announced the price band for its upcoming initial public offering (IPO). The IPO, which will open on August 2 and close on August 6, will see the company offer shares at a price range of Rs 72 to Rs 76 per share. This translates to a total fundraising target of Rs 6,100 crore, comprising a fresh issue of shares worth Rs 5,500 crore and an offer for sale (OFS) of 8,49,41,997 shares.
The OFS portion of the IPO will see existing shareholders, including promoter Bhavesh Aggarwal, Indus Trust, and investors such as Alpha Wave, Alpine, Matrix Partners India Investment, Internet Fund III, MacRitchie Investments, SVF II Ostrich (DE), Tekne Private Ventures, and Ashna Advisors, offloading their stakes. At the upper price band of Rs 76, the OFS would be worth approximately Rs 645.56 crore.
Ola Electric intends to utilize the net proceeds from the IPO for various purposes, including expanding the capacity of its battery cell manufacturing plant, Ola Gigafactory, from 5 gigawatt hours (GWh) to 6.4 GWh. This expansion is expected to be completed by April 2025. Furthermore, Rs 800 crore will be used to repay loans taken by its subsidiary, Ola Electric Technologies. A significant portion of the funds, Rs 1,600 crore, will be allocated towards research and product development, while Rs 350 crore will be invested in growth initiatives.
Ola Electric's IPO marks a significant milestone for the EV startup sector in India. The company has witnessed substantial growth in recent years, with its revenue from operations increasing to Rs 5,009.8 crore in fiscal 2024, up from Rs 2,630.9 crore in fiscal 2023. This growth was primarily driven by increased sales of its popular scooter models, the Ola S1, Ola S1 Pro, Ola S1 Air, and Ola S1 X+. Despite the revenue growth, the company’s loss for the year expanded to Rs 1,584.4 crore in fiscal 2024, up from a loss of Rs 1,472 crore in fiscal 2023.
Ola Electric holds a dominant position in the Indian electric scooter market, consistently commanding over a third of the market share. It competes with established players like Hero MotoCorp-backed Ather Energy, Bajaj Auto, and TVS Motors. As of July 27, Ola Electric had a 39% market share for the month, despite facing increased competition from rivals. While its market share has dipped from 58% in May to 46% in June, Ola Electric remains a key player in the burgeoning Indian electric two-wheeler market.
The IPO is expected to attract significant interest from investors, as it offers an opportunity to invest in a leading player in the rapidly growing electric vehicle sector. The successful completion of the IPO could further bolster Ola Electric’s position in the market and enable it to accelerate its expansion plans, including its ambitions to enter new markets globally.