EV maker Ola Electric sets IPO price band at Rs 72-76 per share, CEO Aggarwal to sell 3.79 crore shares

Bengaluru-based EV maker Ola Electric Mobility is gearing up for its initial public offering (IPO) with a price band set at Rs 72-76 per share.

The IPO will open for subscription on August 2 and will close on August 6. Notably, this is the first IPO by an Indian electric vehicle maker and is anticipated to be one of India's largest IPOs of the year, with the company aiming to raise Rs 6,145.6 crore, or approximately $740 million.

Investment details and stakeholders

Pre-IPO investors in Ola Electric, including some prominent names like Alpine Opportunity Fund VI LP and Tekne Private Ventures XV Ltd, may face potential losses since their acquisition prices are higher than the current price band.

For instance, Alpine Opportunity Fund purchased shares at an average price of Rs 111.51, and Tekne Private Ventures XV at Rs 113.12. This scenario could result in over 30% losses for these investors, with Alpine's 21.42 million shares now valued at Rs 163 crore and Tekne's 36.32 million shares valued at Rs 276 crore at the upper price band.

On the other hand, early investors like Tiger Global and Matrix Partners stand to gain significantly. Tiger Global’s Internet Fund III Pte Ltd, which acquired shares at Rs 11.7 each, and Matrix Partners India Investments III, with shares bought at Rs 8.22 each, will see returns of 550% and 824%, respectively.

Bhavish Aggarwal to sell 37.9 million shares

Promoters Bhavish Aggarwal and Indus Trust will be selling 3.79 crore and 41.79 lakh equity shares, respectively, in the offer-for-sale. Among investors, SVF II Ostrich (DE) LLC, the largest shareholder in the company with a 21.98% stake (or 8.1 crore shares post-conversion of CCPS), will be offloading 2.38 crore shares in the offer-for-sale.

IPO structure and reservation

The IPO consists of a fresh share issue of up to Rs 5,500 crore and an offer-for-sale (OFS) of up to 84.94 million equity shares by promoters and existing shareholders.

The shares are set to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on August 9.

Retail investors will have 10% of the IPO reserved for them, while 75% is earmarked for qualified institutional bidders and 15% for non-institutional investors.

Usage of IPO proceeds

The proceeds from the IPO will be allocated towards various purposes. Specifically, Rs 1,227.64 crore will be used for capital expenditure, Rs 800 crore for the repayment of borrowings, Rs 1,600 crore will be invested into research and development, and Rs 350 crore will be dedicated to expenditure for organic growth.

The company has also reserved shares worth ₹5.5 crore for eligible employees who will receive a Rs 7 per share discount.

Ola Electric’s valuation at the upper price band is Rs 33,522 crore or $4 billion, a decrease from its previous $5.4 billion valuation in September 2023.