Ola Electric Initiates IPO Journey with Rs 7,250 Crore Offering, Files DRHP with SEBI

26 Dec 2023 , 11:59 AM

Ola Electric, the electric vehicle (EV) manufacturer that commenced operations in December 2021, has filed its draft red herring prospectus (DRHP) with the Securities Exchange Board of India (SEBI) on December 22, signaling its much-anticipated initial public offering (IPO). This IPO is significant as it marks the debut of the first pure-play EV-maker in the public markets.

The IPO includes a fresh issue of Rs 5,500 crore and an offer for sale (OFS) of Rs 1,750 crore, totaling Rs 7,250 crore. Existing shareholders, including founder Bhavish Aggarwal and initial investors such as AlphaWave, Alpine, DIG Investment, Matrix, among others, will collectively sell 95.19 million shares in the OFS.

Bhavish Aggarwal plans to sell 47.3 million shares, while initial investors will collectively sell 47.89 million shares through the OFS. Additionally, the company is exploring a re-IPO placement of shares worth Rs 1,100 crore, potentially reducing the size of the fresh issue accordingly.

The funds raised from the IPO, expected to be substantial, will be allocated for capital expenditure (capex), debt repayment, and research and development (R&D). Ola Electric intends to utilize approximately Rs 1,226 crore for capex, Rs 800 crore for debt repayment, and the largest share, around Rs 1,600 crore, for R&D. A further Rs 350 crore will be allocated for inorganic growth.

As of October 31, 2023, the company’s R&D activities involved 974 employees, including scientists and engineers, with 60 holding Ph.D. qualifications. By June 30, 2023, Ola Electric held Rs 231.7 crore in cash and cash equivalents, along with Rs 908.4 crore in bank balances. However, the company also had total borrowings of Rs 1,616 crore, primarily utilized for establishing manufacturing facilities and meeting working capital requirements.