Ola Electric becomes India's first two-wheeler EV startup to receive SEBI approval for IPO, says Report

Bengaluru-based Ola Electric has reportedly become India’s first two-wheeler electric vehicles maker to receive SEBI's approval for an IPO launch. 

According to a Moneycontrol report, the EV giant is looking to raise Rs 7,250 crore. The development comes nearly six months after the EV giant filed its draft red herring prospectus (DRHP) with SEBI. 

Ola Electric's IPO consists of a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totalling Rs 7,250 crore.

As outlined in the firm's DRHP, existing shareholders are expected to sell 95.19 million shares in the OFS. Ola Electric’s founder, Bhavish Aggarwal, 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 size of the fresh issue by that amount.

Shareholder participation

The initial investors of Ola Electric, including AlphaWave, Alpine, DIG Investment, and Matrix, among others, will be selling 47.89 million shares through the OFS.

According to the DRHP, the funds raised from the IPO will be allocated for capital expenditures (capex), debt repayment, and research and development (R&D).

Specifically, the firm 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.

Financial performance

In the financial year ending March 2023, Ola Electric reported consolidated revenues of Rs 2,782 crore, a substantial increase of nearly 510%.

However, the startup's net loss also widened to Rs 1,472 crore due to increased expenses.

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