Ola Electric Secures SEBI Approval for Historic IPO

Key Highlights:

• Ola Electric becomes India's first two-wheeler EV maker to receive SEBI approval for an IPO.
• Aims to raise Rs 7,250 crore through a combination of fresh issue and offer for sale.
• Existing shareholders, including founder Bhavish Aggarwal, plan to sell shares alongside a potential pre-IPO placement.
• Despite revenue growth, Ola Electric's widened net loss in FY23 underscores the need for capital infusion through the IPO.

Bengaluru, India – Ola Electric has become the first Indian two-wheeler electric vehicle manufacturer to receive the Securities and Exchange Board of India's (SEBI) approval for an Initial Public Offering (IPO), as reported by Moneycontrol.

Fund Allocation

The funds raised from the IPO will be allocated for capital expenditures (capex), debt repayment, and research and development (R&D). Specifically, Ola Electric plans to use approximately Rs 1,226 crore for capex, Rs 800 crore for debt repayment, Rs 1,600 crore for R&D, and Rs 350 crore for inorganic growth.

Shareholder Participation and Pre-IPO Placement

According to the DRHP, existing shareholders plan to sell 95.19 million shares through the OFS. Bhavish Aggarwal, Ola Electric’s founder, will sell 47.3 million shares. Additionally, the company is considering a pre-IPO placement of shares worth Rs 1,100 crore, which would reduce the fresh issue size by the same amount.

Early investors in Ola Electric, such as AlphaWave, Alpine, DIG Investment, and Matrix, will be selling 47.89 million shares through the OFS.

Financial Performance

In the fiscal year ended March 2023, Ola Electric reported consolidated revenues of Rs 2,782 crore, representing an almost 510% rise. However, the startup's net loss widened to Rs 1,472 crore due to increased expenses.

For the first quarter of the 2023-24 fiscal year, the company reported a total income of Rs 1,272 crore and losses amounting to Rs 267 crore. As of June 30, 2023, Ola Electric had a net worth of Rs 2,111 crore.

IPO Details

The electric vehicle (EV) giant aims to raise Rs 7,250 crore through the IPO, nearly six months after filing its draft red herring prospectus (DRHP) with SEBI. A new issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore are part of the IPO.

This historic IPO marks a significant milestone for Ola Electric and the Indian EV industry, potentially paving the way for future growth and innovation in the sector.

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