Ola Electric’s Rs 7,250-cr IPO gets Sebi nod, listing likely within one month

The Securities and Exchange Board of India (Sebi) is expected to formally issue the update in the coming days.
Ola Electric’s Rs 7,250-cr IPO gets Sebi nod, listing likely within one month

NEW DELHI: Ola Electric, India’s largest electric scooter maker, has received market regulator Sebi’s approval to launch its much-anticipated initial public offering (IPO). According to sources, the company received the approval on Tuesday and is eyeing a listing on the bourses within a month.

The Securities and Exchange Board of India (Sebi) is expected to formally issue the update in the coming days. According to the last update on June 7, Ola Electric’s DRHP was under process. Without mentioning anything about the IPO, Ola Electric founder Bhavish Aggarwal wrote ‘Exciting month ahead’ on X.

The Bengaluru-based company had filed its draft red herring prospectus (DRHP) with the market capital regulator in December 2023. As per the filing, the public issue will comprise a fresh issue of Rs 5,500 Cr and an offer for sale (OFS) component of up to 9.51 crore shares. The total size of the IPO is pegged at Rs 7,250 crore.

The DRHP had mentioned that Aggarwal will divest 4.7 crore shares via an OFS. Ola Electric has also exercised the option to raise Rs 1,000 crore via pre-IPO placement. If this happens, the fresh issue size will be reduced.Besides the promoter, early investors such as Indus Trust, Kaha Wave Ventures, Alpine Opportunity Fund, DIG Investment Internet Fund, MacRitchie Investments and a few other entities would be divesting stakes. Ola Electric is eyeing a $6 billion valuation through the public offering. If successful, it will become the first pure EV company to hit the Indian stock exchange.

Ola Electric plans to deploy proceeds from the issue to establish the Ola Gigafactory initiative, aiming for a 100 GWh capacity for battery production on a large scale, for the manufacturing of EVs, batteries, and other parts. It will use about Rs 1,226 crore for capex and Rs 800 crore to repay debt. It will spend the most, about Rs 1,600 crore, on R&D, and Rs 350 crore on inorganic growth.

Ola Electric recently said it captured 49% market share in May 2024, continuing its dominance in the EV 2W segment. The company recorded 37,191 registrations (according to the government’s VAHAN Portal) during the month on the back of its strong S1 scooter portfolio, including the all-new mass-market S1 X range.

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