Ola Electric is gearing up to file its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) by December 20, as reported by CNBC-TV18 on December 11. This strategic move is part of the company’s ambitious plan to secure a substantial $700 million through its Initial Public Offering (IPO).
Backed by SoftBank, the company is targeting a valuation in the range of $7-8 billion by early 2024. The funds raised from the IPO will be earmarked for the expansion of Ola Electric’s electric vehicle (EV) business and the establishment of a dedicated lithium-ion cell manufacturing unit.
Ola Electric recently grabbed attention by reportedly scaling back its sales targets for the 2023-2025 period by more than 50% and delaying its profitability goal by a year. This strategic shift is attributed to the impact of reduced government incentives, resulting in an uptick in e-scooter prices. The revenue target for the current fiscal year has been adjusted to $591 million, marking a significant 60% reduction from the initial target of $1.55 billion, according to the report.
On November 17, Ola Electric underwent a pivotal transformation into a public company, a crucial step in its preparations for an IPO. This milestone involved corporate restructuring and necessitated a change in the company’s name from Ola Electric Mobility Private Limited to Ola Electric Mobility Limited. The conversion from a private limited company to a public company is a mandatory procedure for firms aspiring to be listed on the stock exchange.
Earlier, media reports revealed that Ola Electric has roped in Kotak Mahindra Capital and Goldman Sachs for its IPO in early 2024. According to sources, the proposed IPO is expected to involve a mix of primary and secondary share offerings.
The electric vehicle manufacturing giant recently revealed the successful completion of a funding round, securing ₹3,200 crore (approximately $380 million). This capital infusion, comprising a combination of debt and equity from prominent investors led by Temasek and debt from the State Bank of India (SBI), is earmarked for the expansion of Ola’s electric vehicle business. Additionally, the funds will be utilised to establish India’s inaugural lithium-ion cell manufacturing facility at Krishnagiri in Tamil Nadu.
In February 2023, Ola Electric expanded its scooter portfolio, introducing a total of five distinct products.
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Published: 11 Dec 2023, 06:10 PM IST