Ola Electric Faces Investor Backlash Over $7 Billion IPO Valuation

Ola Electric Mobility Ltd., India’s leading electric scooter manufacturer, is experiencing resistance from investors regarding its planned valuation for an upcoming initial public offering (IPO), according to sources.

Targeted Valuation vs. Investor Expectations

The company’s founder aims for a potential valuation of up to $7 billion for its listing in Mumbai. However, feedback from investors suggests a valuation closer to $5 billion. If the valuation stands at $5 billion, current investors might decide against selling their shares in the IPO.

Fundraising and IPO Approval

Ola Electric, backed by prominent investors like SoftBank Group Corp. and Tiger Global Management, aims to raise approximately ₹55 billion ($659 million) through new shares in the IPO. India’s market regulator recently approved the company’s IPO plans.

Expansion Plans

The proceeds from the IPO will help Ola Electric expand its manufacturing capacity, including its electric vehicle (EV) cell factory, increasing capacity from 5 gigawatt hours to 6.4 gigawatt hours. The company is also venturing into battery-powered cars and electric motorcycles.

Market Outlook and Financial Backers

The IPO is part of a broader trend as India remains a strong market for equity capital, especially after recent election uncertainties have settled. Banks involved in the IPO include Kotak Mahindra Capital Co., Citigroup Inc., Bank of America Corp., and Goldman Sachs Group Inc.

Founder’s Vision

Bhavish Aggarwal, Ola Electric’s founder, is building what he claims to be the world’s largest EV hub in southern India, aiming to produce battery-powered two-wheelers, cars, and lithium-ion cells.

Despite investor pushback on the IPO valuation, Ola Electric continues to push forward with its ambitious plans to lead in the electric vehicle sector.