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Ola Electric, the leading electric two-wheeler manufacturer in India, is set to make history with its upcoming initial public offering (IPO). This Rs 6,146-crore IPO, the largest of its kind this year, will be the first IPO by an auto company since Maruti Suzuki (then Maruti Udyog) went public in mid-2003. The bidding for the IPO will commence on August 2nd and conclude on August 6th, with a price band of Rs 72-76 per share. At the upper end of the price band, the implied valuation of the company stands at $4 billion, a figure lower than the $7-8 billion valuation Ola Electric was initially targeting just a few months ago. This valuation is also lower than the $5.4 billion valuation it secured in its last funding round in September 2023.
Despite the adjusted valuation, Bhavish Aggarwal, founder and chairman of Ola Electric, expressed confidence in the IPO's appeal to investors. He stated, “We wanted to price it at attractive, aggressive levels so that they (investors) make money.” Of the total funds being mobilized through the IPO, Ola Electric plans to raise Rs 5,500 crore through a fresh issuance of shares. The remaining portion will come from an offer for sale by existing shareholders, including prominent global investment firms SoftBank and Temasek.
Aggarwal is optimistic about the future of the Indian electric vehicle (EV) market, asserting that there is no slowdown in its growth. He believes the EV story truly began when Ola Electric launched its product three years ago and expects the momentum to continue, despite cyclical fluctuations driven by factors such as subsidy changes and seasonality. He highlighted Ola Electric's impressive year-on-year growth, exceeding 90% in FY24 compared to FY23, demonstrating the company's robust performance. He also emphasized that as more companies enter the EV market and launch new products, the market's scope will only expand.
Ola Electric is prepared for the scrutiny that comes with being a publicly listed company. Aggarwal stated that they have rigorously prepared their governance and processes to meet the expectations of public markets and even exceed them. Following the listing, which is expected in the second week of August, promoters are anticipated to retain a 37-38% stake in the company. The IPO marks a significant milestone for Ola Electric and the Indian EV industry, signaling a strong commitment to sustainable mobility solutions.
Source: Ola Electric eyes Rs 6,000 crore in 1st auto IPO since Maruti