Ola Electric IPO: Key Information Before You Invest in Bhavish Aggarwal’s Game-Changing Venture

Ola Electric Mobility Ltd’s much-awaited initial public offering (IPO) is set to launch on Friday, August 2, and will close on Tuesday, August 6. The price band for the IPO is set between ₹72 and ₹76 per share.

Offer Details

The IPO includes a mix of new shares and offers for sale from existing investors, aiming to raise ₹6,145.96 crore. This includes a new issue worth ₹5,500 crore and an offer for sale (OFS) valued at ₹645.96 crore. The total market value of the company is estimated to be around ₹33,500 crore.

Key Shareholders and Offer for Sale

Promoters Bhavish Aggarwal and Indus Trust will sell 3.79 crore and 41.79 lakh equity shares, respectively. SVF II Ostrich (DE) LLC, the largest stakeholder with 21.98% ownership, will offload 2.38 crore shares via the OFS.

Use of Funds

The funds raised will be used for research and product development, paying down debt, and funding organic growth initiatives. Capital expenditures will also be made to expand the capacity of Ola Electric’s cell manufacturing plant from 5GWh to 6.4GWh.

IPO Allocation

75% of the IPO shares are reserved for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 10% for retail investors.

Important Dates

• Share Allocation Finalization: Wednesday, August 7
• Refunds Initiation: Thursday, August 8
• Shares Credited to Demat Accounts: Thursday, August 8
• Listing Date: Friday, August 9

Lead Managers and Registrar

Kotak Mahindra Capital, Bofa Securities India, Axis Capital, SBI Capital Markets, Citigroup Global Markets India, Goldman Sachs (India) Securities, ICICI Securities, and Bob Capital Markets are the book running lead managers. Link Intime India is the registrar for the issue.

Promoters and Shareholders

Bhavish Aggarwal is the company’s promoter, holding 36.94% of the company’s equity share capital. Notable investors include actor and filmmaker Farhan Akhtar, who purchased two shares for ₹2.14 crore, and Zoya Akhtar, who bought a single share for ₹1.07 crore. Ritesh Sidhwani also purchased two shares in the Series C financing round.

Industry and Competition

Ola Electric competes with companies like TVS Motors, Eicher Motors, Bajaj Auto, and Hero MotoCorp. The company focuses on manufacturing electric vehicles (EVs) and their components. It operates an extensive direct-to-customer distribution network with 431 service centres and 870 experience centres across India.

Manufacturing Units

Ola Electric has manufacturing units in Tamil Nadu and a Futurefactory, Gigafactory, and Battery Innovation Center in Bengaluru.

Financial Performance

For the financial year ending March 31, 2024, Ola Electric reported a profit after tax decrease of 7.63%, while sales increased by 88.42%.

Key Risks

Ola Electric has experienced losses and negative cash flows since its inception. The company’s short experience in producing EVs poses a risk to its future success and cost-effectiveness.

Lock-In Period

There is a 90-day lock-in period for 50% of the equity shares allotted to anchor investors and a 30-day lock-in period for the remaining shares.