Ola Electric has submitted the draft papers for the IPO to the Securities and Exchange Board of India (SEBI). According to the news agency, the company plans to collect ₹5,500 crore ($661.9 million) through the IPO.
According to the information received, new shares will be issued in this IPO. Under the IPO, the company’s CEO Bhavish Aggarwal will sell 47.4 million shares.
We will tell you that the IPO of a two-wheeler company is going to be launched after 15 years.
Bajaj Auto IPO came in the year 2008. Through this the company entered the stock market.
Who is Selling the Stake?
Apart from Ola Electric founder Bhavish Aggarwal, investors Alpha Web Venture II, DIG Investment IV AB, Internet Fund III Pte Ltd, MacRitchie Investment Ltd, Matrix Partners India Investment III, LLC and SVF II Ostrich (DE) LLC are also selling stake.
Apart from this, other investor Techne Private Ventures XV, Limited is also selling stake.
Income
In the last financial year (2022-23), the total income of Ola Electric increased almost six times to Rs. 2,782 crores.
In the financial year 2021-22, the total income of the transport division of Ola Electric was Rs 456 crore.
According to data provided by the Society of Manufacturers of Electric Vehicles, Ola Electric dominates India’s electric two-wheeler market with 32% share.
This company competes with TVS Motor, Bajaj Auto and Ather Energy.
Last October, Bengaluru-based electric vehicle maker Ola Electric was valued at $5.4-5.5 billion. The company then collected $384.43 million from Temasek and State Bank of India.
However, when government incentives were reduced and the cost of e-scooters increased, the company cut its 2023-2025 sales target by more than half. Apart from this, the company has delayed its target of achieving profit by one year.
Face Value
This proposed initial public offering (IPO) will raise Rs. Involves issuing new equity shares up to Rs. 5,500 crore, and the offer for sale (OFS) consists of 95,191,195 equity shares with an estimated face value of Rs. There are 10.
IPO Reservation
The IPO process will use a book-building approach, with 75% of the fixed allotment for the issue being reserved for Accredited Institutional Buyers (QIBs).
Up to 15 per cent for Non-Institutional Investors (NIIs) and not more than 10 per cent for individual retail bidders.
This is a significant moment as it is the first IPO of an Indian electric vehicle (EV) manufacturer, and the first two-wheeler manufacturer in India since the launch of Bajaj Auto in 2008.
Bengaluru-based Ola Electric, backed by SoftBank and Temasek, has raised an estimated valuation of $5.4 billion in its latest funding round.
Ola Electric targets an estimated valuation between $7-8 billion by early 2024.
Bhavish Aggarwal, founder of Ola Electric, is ready to sell about 47.4 million shares of the e-scooter manufacturing company owned by SoftBank Group.
IPO Opening and Closing Date
According to the draft red herring prospectus (DRHP) filed by Ola Electric, the start and end dates of the initial public offering (IPO) subscription have not yet been made public.
Although DRHP does not provide these dates, various reports in the media suggest that public filling will begin in 2024. Additionally, the offer price and IPO price band are not known at this time.
Key IPO details:
Fresh issue of equity shares up to Rs 5500 crore.
Offer for Sale (OFS) for 95,191,195 equity shares with an amount of Rs 10 each.
According to the draft paper filed on December 22, Bhavish Aggarwal will be able to withdraw 47.4 million shares.
Bhavish Aggarwal previously invested at least Rs. 1 in Pune-based electric vehicle company Torque Motorcycle. There were shareholders worth Rs 45 lakh.
Some Things you Need to Know
What are the funds used for? According to the DRHP, the proceeds from the new issue will be used for various purposes:
Ola Cell Technologies’ Gigafactory project worth Rs. 1,226.4 million
Research and Development (R&D) investment of Rs. 1,600 crores
To finance organic growth initiatives and general corporate goals, Rs. 350 crores
For prepayment or repayment of liabilities in the company Ola Electric Technologies (OET) Rs. 800 crores
What are their book management teams?
The main managers of the book include Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets and BOB Capital Markets.
Debt is Increasing:
The company expects to continue to suffer operating losses in the short term and is focusing on expanding its business and broadening its product portfolio.
Possible disadvantages:
Ola Electric accepts the possibility of operating losses in the short term but is committed to investing in diversification and expansion of the business.
It has an estimated $1600 million plan for research and development (R&D) in the next three years.
Sales Highlights:
The month of November 2023 was Ola Electric’s most successful record till date selling 30,000 units and achieving 35% market share.
The company has sold more than 300,000 electric cars since its launch on December 20, 2021.
In December, the company sold 9,841 electric scooters and contributed to the total sales of more than 1.8 thousand vehicles in FY24.
Additionally, the company was recognized as the top choice in the segment of Indian e-two-wheelers (E2Ws) as well as original equipment manufacturers (OEMs) in terms of E2W revenue sales during FY23.
Income Growth:
During FY 2023, Ola Electric witnessed a significant growth in profits from its operations.
Last year it was Rs. Increase from Rs 373.42 crore to Rs. It was Rs 2,630.93 crore. Operating income for the quarter ending June 30, 2023 is Rs. 1,242.75 crore was registered.
Compliance with Regulatory Laws:
Ola Electric announced that it has paid Rs 15 lakh as penalty to the Ministry of Road Transport and Highways (MoRTH) following the S1 scooter fire incident in Pune in March 2022.
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