Ola Electric IPO: Valuation Likely To Be Set At $4.5 Bn

Ola Electric IPO: Public Issue Subscribed 4.27X On The Final Day Of Bidding

SUMMARY

In its last funding round of $384 Mn in October last year, led by Singapore's investment firm Temasek, Ola Electric was valued at $5.4 Bn

While the final valuation is still subject to change, it is unlikely to reach CEO Bhavish Aggarwal’s $6 Bn target

Ola Electric filed its DRHP in December last year and received SEBI’s nod for the public issue last month

Electric vehicle (EV) maker Ola Electric is reportedly likely to be valued at around $4.5 Bn for its upcoming IPO, a decline of 16-20% from its last funding round.

In its last funding round of $384 Mn in October last year, led by Singapore’s investment firm Temasek, Ola Electric was valued at around $5.4 Bn. However, Reuters cited a source as saying that this valuation is expected to drop due to a “recalibration” of tech stock valuations globally.

While the final valuation is still subject to change, it is unlikely to reach the $6 Bn target that Ola Electric’s founder, Bhavish Aggarwal, had hoped for the IPO, the report added citing sources.

Meanwhile, a source told Inc42 that the book building process is ongoing and the final valuation is yet to be determined. The company aims to price the IPO attractively, ensuring it offers value to investors. The reported figure is a close estimate, the source added.

Ola Electric filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an INR 5,500+ Cr IPO in December last year. Last month, it received the regulator’s nod for the public issue.

Founded by Ola Cabs cofounder Aggarwal, Ola Electric is an EV manufacturer with five scooter models. It is one of the biggest players in the two-wheeler EV space in the country. It operates a comprehensive omnichannel distribution network, which included 935 experience centres and 414 service centres, as of October 2023.

Earlier this year, Ola Electric secured INR 410 Cr (around $50 Mn) in debt funding from EvolutionX Debt Capital via non-convertible debentures (NCDs). The company raised funding by issuing 41,000 NCDs at an issue price of INR 1 Lakh each, as per its filing with the Registrar of Companies (RoC).

As it gears up for its IPO, the company has undertaken a company-wide restructuring exercise to cut costs and streamline operations. The EV player was also said to be planning to sack nearly 400-500 employees.

Ola Electric’s net loss widened 88% to INR 1,471.6 Cr in the financial year 2022-23 (FY23) from INR 783.4 Cr in the previous year. Operating revenue surged 605% year-on-year (YoY) to INR 2,630.9 Cr in FY23.