Electric two-wheeler firm, Ola Electric Mobility’s proposed Rs 5,500 crore initial public offering (IPO) has received Securities and Exchange Board of India’s nod.
The company can now tap the market with a significant part of the proceeds to be used on capacity expansion of its cell manufacturing plant and sprucing up R&D.
Ola Electric had filed its draft red herring prospectus with Sebi in December, 2023, and had obtained its observations on June 10. In Sebi’s parlance, its observations means its go-ahead to float the public issue.
Ola Electric’s proposed IPO is a combination of fresh issue of equity shares up to Rs 5,500 crore and an offer for sale (OFS) of 95.2 million equity shares by promoters and investors, according to the DRHP.
This will be the first public listing by a domestic EV firm.
Promoter Bhavish Aggarwal will offer up to 47.4 million shares in the OFS, and Indus Trust, which is also a part of the promoter group entity, will offer up to 4.2 million shares.
Meanwhile, among institutional holders, Softbank Group is the biggest seller in the OFS, offering 23.9 million shares.
The second biggest institutional seller is venture capital firm Matrix Partners, offering 3.7 million shares in the OFS. Private equity firm Tiger Global is offering up to 6.4 million shares.
The other sellers are global investment firm Alpha Wave Ventures II that will offer upto 3.8 million shares, private equity firm Alpine Investors (upto 630,336 shares), and few others.
For Ola Electric, the IPO will provide the much-needed impetus to invest in enhancing cell manufacturing capacity and research and development on future technologies and products.
According to its draft papers, Ola Electric Mobility (OEML) plans to utilise Rs 1,226.43 crore out of the proceeds of its Rs 5,500 crore public issue on capacity expansion of its cell manufacturing plant to 6.4 GWh from 5 GWh.
The company is also looking to use Rs 1,600 crore from the fresh fund on research and product development, while another Rs 800 crore will be deployed to repay debts.
In its DRHP, OEML said the phase 1 (a) and phase 1 (b) of the set up and expansion of the Ola Gigafactory at Krishnagiri district in Tamil Nadu will be funded from internal accruals and long-term borrowings availed by its arm Ola Cell Technologies (OCT).
In the details of the objects of the IPO, the company said a portion of the proceeds will be used for capital expenditure to be incurred by OCT for expansion of the capacity of cell manufacturing plant from 5 GWh to 6.4 GWh.
OEML which had on August 15, 2023 announced a line-up of electric motorcycles — Cruiser, Adventure, Roadster and Diamondhead — expects to begin delivery of the motorcycles in the first half of FY26.
On future product launch plans, the company said, “We plan to further launch affordable mass market Ola S1 models, including E2Ws (electric two-wheelers) targeted at the personal, business-to-business and last-mile delivery segment by first half of fiscal 2025”.
The company said that it also plans to commence delivery of motorcycles, which it announced on August 15, 2023, by the first half of fiscal 2026. “We plan to further expand our product portfolio to also cover mass market motorcycles to capture a broader base of consumers across different product types and price points in the long run,” it said.
