The IPO comprises a fresh issue of INR 5,500 Cr and an offer-for-sale (OFS) component of 9.51 Cr shares
Major investors such as Softbank, Temasek, Tiger Global, Alpha Wave, Tekne Capital, Matrix Partners are slated to participate in OFS.
The proceeds from the fresh issue will be deployed for capital expenditure to set up the Ola Gigafactory project, investment into research and product development, and organic growth initiatives
Electric vehicle (EV) maker Ola Electric has filed its draft red herring prospectus with the markets regulator Securities and Exchange Board of India (SEBI) for an INR 7,250 Cr initial public offering (IPO).
As per the DRHP, the IPO comprises a fresh issue of INR 5,500 Cr. However, as per a Moneycontrol report, the IPO will comprise an offer-for-sale (OFS) component of INR 1,750 Cr. In total, the public issue will comprise an OFS component of up to 9.5.1 Cr shares.
“The issue is being made through the book-building process, wherein not less than 75% of the issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the issue… to non-institutional bidders, and not more than 10%.. to retail individual bidders,” the company said in a statement.
Cofounder CEO Bhavish Aggarwal and major investors such as Softbank, Temasek, Tiger Global, Alpha Wave, Tekne Capital, and Matrix Partners are slated to participate in the OFS. The company will be listed on the BSE and NSE.
Aggarwal, who is also the promoter, will account for more than half of the total OFS corpus and will offload 4.7 Cr shares during the IPO. Japanese tech investor SoftBank will offload 2.38 Cr shares in the company, which it acquired for INR 50.94 apiece.
Promoter group Indus Trust will sell another 41.7 Lakh shares while Alpha Ventures and Tiger Global’s Internet Fund III will dump 37.82 Lakh and 63.6 Lakh shares, respectively.
Along similar lines, Matrix Partners India will sell 37.27 Lakh shares and Tekne Capital will offload 9.75 Lakh shares in the EV maker. With this, the stage has been set for Ola Electric to be the first Indian EV startup to go public.
As per the DRHP, the proceeds from the fresh issue will be deployed for capital expenditure that will be incurred towards the setting up of the Ola Gigafactory project. It will also be utilised for investment into research and product development, organic growth initiatives and general corporate purposes.
The proceeds will also go towards repayment or prepayment of the indebtedness incurred by the subsidiary Ola Electric Technologies.
As per the draft document, the original equipment manufacturer (OEM) reported losses to the tune of INR 1,472 Cr in the fiscal year ended March 2023, growing 1.87X from INR 784.1 Cr in the previous fiscal year.
During the same period, revenues from operations jumped more than 7X YoY to INR 2,630 Cr FY23 as against INR 373.4 Cr in FY22.
The company also shed light on its financial numbers for the first quarter (Q1) of FY24 where losses stood at INR 267.1 Cr against an operating revenue of INR 1,242.7 Cr during the period.
Kotak Mahindra Capital, Citigroup Global Markets India, BofA Securities India, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, SBI Capital Markets and BOB Capital Markets have been appointed as the bookrunners for the IPO.
The DRHP also gave an insight into key internal risks faced by the company. Ola Electric conceded that it may continue to incur operating losses in the near term, adding that it may face significant delays in setting up its gigafactory.
“We may face significant delays in setting up of the factory, including procurement and successful integration of local and imported machinery, shortcomings in the operation and maintenance of the factory and delays or failure in receipt of key government approvals. We may also be unable to achieve the level of automation and precision required for cell manufacturing,” the DRHP highlighted.
It also came to the fore in the document that the fire incident, involving Ola S1 Pro scooters, in Pune in March last year led to the Ministry of Road Transport and Highways (MoRTH) imposing a fine of INR 15 Lakh on the company, which has since been paid.
A brainchild of Ola Cabs cofounder Bhavish Aggarwal, Ola Electric is an EV manufacturer that currently retails a portfolio of five scooter models. As per the DRHP, the company operates a full-fledged omnichannel distribution network that comprises 935 experience centres, including 414 service centres, at the end of October 2023.
The filing of the DRHP comes a month after the EV juggernaut converted into a public company and changed its name to Ola Electric Mobility Limited. In October, Ola Electric also raised a mammoth INR 3,200 Cr funding round, in a mix of equity and debt, that saw participation from the likes of Temasek and the State Bank of India.
The markets regulator will now take a call on the company’s DRHP and will mull approval for the much-awaited public listing.
With this, Ola Electric has joined a growing list of Indian startups looking to list on the bourses in 2024. As market headwinds and investor sentiments improve, new-age tech companies are bullish on listing on the bourses and it is this positive trend that Ola Electric aims to capitalise on.
However, it remains to be seen whether the startup eventually moves ahead with the much-awaited IPO even as markets intently keep an eye on the same.
