SEBI Sanctions Ola Electric’s IPO for Rs.7250 Crores

Ola Electric filed its draft red herring prospectus (DRHP) with the markets regulator on December 22, 2023. The electric vehicle maker has now received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO), aiming to raise Rs 7,250 crore, according to sources cited by Moneycontrol. This marks a significant milestone as Ola Electric is the first Indian EV two-wheeler manufacturer to file for an IPO.

On May 25, sources revealed that Ola Electric enlisted Kotak Mahindra Capital and Goldman Sachs to manage the IPO, expected to launch in early 2024. The IPO will consist of a fresh issue worth Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totaling Rs 7,250 crore. Existing shareholders will sell 95.19 million shares in the OFS, including 47.3 million shares from founder Bhavish Aggarwal and 47.89 million shares from early investors such as AlphaWave, Alpine, DIG Investment, Matrix, and others.

Additionally, Ola Electric is considering a pre-IPO placement of shares worth Rs 1,100 crore, which would reduce the size of the fresh issue accordingly. According to the DRHP, the funds raised will be allocated to capital expenditures (Rs 1,226 crore), debt repayment (Rs 800 crore), research and development (R&D) (Rs 1,600 crore), and inorganic growth (Rs 350 crore).

SEBI’s approval comes as Ola Cabs, Ola Electric’s ride-hailing counterpart, initiates preliminary discussions with investment banks for its potential IPO. Ola Electric currently dominates the EV two-wheeler market with a 52% market share. Data from the Government’s VAHAN website shows the company registered 34,000 units in the past month, achieving a 54% year-on-year growth.