Ola Electric’s IPO Launches With Big Expectations

Ola Electric, a major player in India’s electric vehicle market, is gearing up for its much-anticipated initial public offering (IPO) set to open for subscriptions on August 2, 2024. The company, known for its innovative approach and commitment to green mobility, is looking to raise around Rs 10,000 crore at the listing.

The IPO will feature a price band of Rs 72-76 per share, with Bhavish Aggarwal, the founder, looking to offload a portion of his shares in the process. With a remarkable 35 percent market share in India’s electric two-wheeler sector, Ola Electric has gained significant traction, having sold over 3.29 lakh units in the last fiscal year.

In the upcoming IPO, Ola Electric plans to offer fresh shares worth up to Rs 5,500 crore alongside an offer for sale amounting to Rs 645.56 crore from its promoters and existing shareholders. Aggarwal will be letting go of over 37 million shares, while Indus Trust is set to sell about 4.18 million shares as well.

Despite its impressive sales growth, Ola Electric has been facing challenges with operating losses, which increased to Rs 1,584 crore in the latest fiscal year. The company acknowledged that it may continue to incur losses in the near term as it aims to expand its product portfolio and scale operations.

To finance its ambitious plans, Ola Electric intends to allocate Rs 1,600 crore out of the net IPO proceeds for research and development. The company emphasizes the need for innovation and growth to strengthen its position in the rapidly evolving EV market.

Ola Electric, founded by Aggarwal who holds a technology degree from IIT Bombay, focuses on manufacturing both electric vehicles and essential components in-house. This vertically integrated model gives them an edge in the industry, allowing for better control over costs and quality.

Although facing competition from other established players, Ola Electric is optimistic about its future. With a growing demand for electric vehicles and government incentives supporting the industry, it aims to capitalize on its strong market presence and innovative solutions.

As the EV sector continues to expand, Ola Electric’s IPO is seen as a key development that could further propel growth and showcase the potential of green mobility in India.