IPO-Bound Ola Electric Bags PLI Automotive Certificate From ICAT

Bhavish Aggarwal-led electric vehicle maker Ola Electric has bagged a PLI-Automotive Certificate from the automotive testing agency International Centre for Automotive Technology (ICAT) under the production-linked incentive (PLI) scheme for the automobile and auto component industry.

“Ola Electric’s Battery Electric Vehicle – 2W (Ola S1 Pro Gen2) met the criteria of minimum DVA (domestic value addition) of 50% for the Automotive PLI certificate, demonstrating their commitment to the indigenisation of advanced automotive technology products,” ICAT said.

Ola S1 Pro (Gen2) two-wheeler, which has been on-road since September 2023, will now be able to avail incentives under the PLI scheme from the date of issuance of the certificate, a senior Ola Electric official told PTI.

This comes days after Ola Electric secured certification for its second product under the PLI scheme for the automobile and auto component industry.

ICAT is one of the nodal testing agencies to grant the certification after thorough checks on the localisation standards of the components.

Under the scheme, Ola Electric is eligible for incentives for up to five consecutive financial years from FY24. The incentive would range between 13% and 18% of the determined sales value of the products.

The company is eligible to receive incentives under the ACC PLI scheme over five years from the date of commissioning of the Ola Gigafactory in Krishnagiri, Tamil Nadu.

In December, Ola Electric filed its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) for an INR 7,250 Cr 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.

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.

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. 

The company 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.