EV player Ola Electric files IPO papers with SEBI

Ola Electric, Bengaluru-based electric two-wheeler manufacturer, has filed its draft red herring prospectus (DRHP) with capital market regulator SEBI to raise funds via initial public offering (IPO) route. This is going to be first public offering by a pure electric vehicle (EV) company in India.

The IPO is a fresh issue of equity shares up to ₹5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares by existing shareholders at a face value of ₹10 each. The offer document filed with the SEBI shows that Ola Electric has reserved 75% of the issue for qualified institutional buyers, 15% for non-institutional bidders, and the remaining 10% for retail investors.

As per the DRHP, the fund raised from the fresh issue will be used for capital expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project, repayment of indebtedness incurred by subsidiary, OET. A part of the capital will be used for investment into research and product development, funding organic growth initiatives, and general corporate purposes.

Ola Electric was established in 2017 as a wholly-owned subsidiary of ANI Technologies, the parent entity of Ola Cabs. Over the years, Bhavish Aggarwal-led company has become India's leading manufacturer of electric vehicles with the largest integrated and automated E2W manufacturing plant, spread across 400+ acres in Krishanagiri, Tamil Nadu. 

It manufactures EVs and core EV components such as battery packs and motors at Ola Futurefactory, its manufacturing facility in Krishnagiri. The company is in the process of building a EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu, India, which includes the Ola Futurefactory, upcoming Ola Gigafactory and co-located suppliers in Krishnagiri district.

According to the Redseer Report mentioned in the DRHP, in fiscal 2023, the company topped the charts among Indian incorporated electric 2-wheelers (E2Ws) and original equipment manufacturers (OEMs) in terms of revenue from E2W sales.

The report highlights that India is at the forefront of electrification of mobility due to the favourable total cost of ownership as compared to internal combustion engine vehicles. India is the second largest two-wheeler market globally (by domestic sales volume) and electric two-wheelers (E2Ws) are projected to account for 41-56% of the domestic 2W sales volumes by fiscal 2028.

For the fiscal year 2023, Ola Electric’s revenue from operations stood at ₹2,630.93 crore, rising more than seven times from ₹373.42 crore a year ago. For the three months ended June 30, 2023, revenue from operations was at ₹ 1,242.75 crore.

As per the DRHP, it operates its direct-to-customer (D2C) omnichannel distribution network, comprising of 935 experience centres across India which includes 414 service centres, as of October 31, 2023. Its D2C omnichannel distribution network comprises of an integrated company-owned sales and service network, a charging network, and an online retail platform

The company has also been approved for India’s PLI schemes – one relating to the manufacturing of advanced automotive technology products (Automobile PLI Scheme), and another relating to advanced cell chemistry batteries (Cell PLI Scheme).

The company recently announced new EV scooter models, the Ola S1 X (2 kWh) and Ola S1 X (3 kWh) and Ola S1 X+. It started delivering Ola S1 X+ in December 2023. It plans to commence delivery of the Ola S1 X (2 kWh) and the Ola S1 X (3 kWh) by the first half of the Fiscal 2025. It is also working towards delivering the recently announced line-up of four motorcycle models: Diamondhead, Adventure, Roadster, and Cruiser in the first half of Fiscal 26.

In September 2023, the company launched MoveOS version 4, as a beta roll-out, which included new features such as navigation powered by Ola Maps, call filter, ‘find my scooter’, geofencing, time fencing, anti-theft alert, fall detection, hill hold, auto turn-off indicators, ride journal and energy insights. Its EV scooters are connected to a network and designed to transmit data through the vehicle telematics systems, this enables them to continually enhance its product features and performance.

It introduced its first EV model – S1 Pro in August 2021 and currently has a portfolio of 5 scooter models. Within nine months of Ola Electric delivering its first EV scooter, it surged to become the best-selling E2W player in India based on E2W registrations listed on the VAHAN Portal of the Ministry of Road Transport and Highways. As of three-months period ended June 30, 2023, it has an E2W market share of 31% and aims to explore exporting EVs to specific international markets in the future.

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, BofA Securities India Limited, Goldman Sachs (India) Securities Private Limited, Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited and BOB Capital Markets Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar of the offer.