10 Essential Insights into Ola Electric’s IPO: The Securities and Exchange Board of India (SEBI) received Ola Electric’s Draft Red Herring Prospectus (DRHP) on December 22. Up to 5,500 crore worth of new equity shares will be released as part of the planned issue. There will also be an offer for sale (OFS) of 95,191,195 equity shares with a price value of 10 rupees each.
Bhavish Aggarwal, the creator of Ola Electric and a SoftBank Group investor, plans to sell about 47.4 million shares in the e-scooter business. The company wants to be worth between $7 and $8 billion by the beginning of 2024.
Reports say that the IPO membership may start in early 2024, but the times have not been made public yet. The offer price and the IPO price band have not been made public.
Ola Electric made a big change on November 17 when it became a public company. This was an important step in getting ready for its IPO. The company had to change its name from Ola Electric Mobility Private Limited to Ola Electric Mobility Limited as a result of the restructuring. Companies that want to be traded on the stock market have to go through the process of changing from a private limited company to a public company.
Supreme Power Equipment IPO: GMP, subscription status, other details of NSE SME issue in 10 points
10 Essential Insights into Ola Electric’s IPO for Investors
- How much money should be given to each type of investor? The process uses a book-building method, with certain shares set aside for each group: qualified institutional buyers (QIBs) will get 75% of the issue, non-institutional investors (NIIs) will get up to 15%, and private individual bids will get no more than 10%.
- New equity shares worth up to ₹5,500 crore and 95,191,195 equity shares worth ₹10 each are being offered for sale as part of the planned issue. The goal is to raise funds. Bhavish Aggarwal, the creator of Ola Electric and a SoftBank Group investor, plans to sell about 47.4 million shares in the e-scooter business. The company wants to be worth between $7 and $8 billion by the beginning of 2024.
- A lot of people are selling shares in the IPO, not just Bhavish Aggarwal. These include Indus Trust, Kaha Wave Ventures, Alpine Opportunity Fund, DIG Investment Internet Fund, MacRitchie Investments, Matrix Partners India Investments, SVF II Ostrich, and Tekne Private Ventures XV.
- What are you going to do with the money? According to the DRHP, the money from the new issue will be used for a number of different things:
- — 1,226.4 crore for the Gigafactory project by Ola Cell Technologies
- — ₹1,600 crore to spend on research and development (R&D)
- — ₹350 crore for general business uses and efforts for organic growth
- – ₹800 crore to settle Ola Electric Technologies’ (OET) bills
- Taking on more debt: The business expects to keep losing money in the short term while working on growing its business and product line.
- Potential Losses: Ola Electric knows that it could lose money in the short term, but it is still committed to spending in growing and diversifying its business. Over the next three years, it plans to spend about ₹1,600 crore on research and development (R&D).
- Sales Highlights: In November 2023, Ola Electric sold 30,000 units, which was the most ever and gave them a 35% market share. The business has sold more than 300,000 electric cars since it began in December 2021. The company sold 9,841 e-scooters in December alone, which added up to over 1.8 lakh cars sold in FY24. In terms of income from sales of electric two-wheelers (E2Ws) in FY23, the company stood out as the winner among Indian OEMs and E2W builders.
- Revenue Surge: Ola Electric’s operating income rose sharply from ₹373.42 crore the previous year to ₹2,630.93 crore in the fiscal year 2023. ₹1,242.75 crore was made from business in the quarter that finished on June 30, 2023.
- Compliance with Regulations: Ola Electric said it paid the Ministry of Road Transport and Highways (MoRTH) ₹15 lakh as a fine after one of its S1 bikes caught fire in Pune in March 2022.
