IPO-Bound Ola Electric Secures PLI Certification For Second Scooter

Bhavish Aggarwal-led electric vehicle maker Ola Electric has secured certification for its second product under the production-linked incentive (PLI) scheme for the automobile and auto component industry, people close to the matter told Inc42.

The development was first reported by Moneycontrol.

The initial public offering (IPO)-bound company received the domestic value addition (DVA) certification for its S1 Pro (Gen-2) scooter last week. This comes days after it got the DVA certificate for S1 Air scooter, making it the first Indian electric two-wheeler (e2W) company to become eligible for the government’s PLI scheme.

“The company applied for PLI certification for S1 Pro in the second half of October at ICAT, Manesar and received the certification on February 9, 2024. Ola S1 Pro and Ola S1 Air are now eligible for subsidies under the government’s Auto PLI scheme for five years from the date of certification,” as per Moneycontrol’s report.

The scheme enables Ola Electric to receive incentives for up to five consecutive financial years, commencing in fiscal 2023-24. The incentive would range between 13% and 18% of the determined sales value (DSV) of the products.

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. 

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